Brand Innovation and Development: A Comparison between Blockbuster and Netflix Companies

Running head: BRAND INNOVATION AND DEVELOPMENT 1
Brand Innovation and Development: A Comparison between Blockbuster and Netflix
Companies
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BRAND INNOVATION AND DEVELOPMENT 2
Introduction
In the corporate world, not all companies thrive as per their expectations. With the
rationale behind the success or failure of companies mainly associated with financial and
marketing strategies, companies are required to critically analyze financial and marketing
concepts before and after entering markets. Many successful companies are associated with
the employment of effective and efficient marketing strategies while the failing ones are
characterized by poor marketing strategies. The concept of attracting and maintaining
customers is critical in whether a brand will end up a success or not. Brands with a
characteristic ability to influence, attract and retain customers are more likely to flourish in
their respective industries. On the other hand, a brand with a habit of receiving random
complains is likely to lose customers and suffer losses. Due to the fact, the sole reason a firm
remains in business is profits, losses may lead to incidences where firms close down. This
essay attempts to examine contributing factors to the success and failure of Netflix and
Blockbuster companies in the filming industry. The paper illustrates the firms' respective
histories and their distinct branding strategies. The rationale behind the companies' success
and failure are also discussed. Moreover, a graphical comparison of the firms' performance in
the filming industry is drawn to give a more vivid description of their respective
performance.

BRAND INNOVATION AND DEVELOPMENT 3
History
Netflix Inc.
Netflix Inc., or simply Netflix is an American video on demand company that
transmits videos and films. The company was formed by Reed Hastings and Marc Randolf in
19th August 1997. After leaving Pure Software, Marc Randolph and Reed Hastings
established the first Netflix offices in Scotts Valley, California. It is believed that the two co-
founders formed Netflix after they had been charged 40 US dollars for an overdue video
(Hoffman, 2013). The scholar asserts that in its first stages, Netflix charged an amount of 6
US dollars per rental. The company served its customers by providing DVD sales and rentals
by mail. In 2007 when Netflix changed its business model, the company functions by
streaming videos and film to viewers throughout the globe. The scholars confirm that after
two years, the company had started charging their clients on a monthly basis. Since its
conception in 1997, Netflix has experienced significant growth and has commanded the
movie and film industry. Dias & Navarro (2018) assert that by December 2017, Netflix had
gained a customer base of about 110 million subscribers worldwide. This was a manifestation
that by 2017, the Netflix brand was already commanding video and filming industry.

BRAND INNOVATION AND DEVELOPMENT 4
Blockbuster LLC
Formerly Blockbuster Entertainment, Blockbuster LLC, commonly referred to as
Blockbuster Video or simply Blockbuster was found in October 1985 by a renowned
computer programmer, David Cook. The first offices were located in Dallas. Cook had
developed the idea of opening up Blockbuster after he had noticed that viewers were
generally unhappy of the existing movie rental options. Cook, therefore, designed a new
video game store that offered a large selection of computerized inventory tracking system
(Calkins, 2012). The company functioned as a DVD and videogame rental service that
boasted more than 1000 stages in its first stages. In the late 1980s and 1990s, the company
gained a large following and retained thousands of customers. The company controlled a
large section of USA’s viewers. In 2009, Blockbuster was at its peak but in 2010, the
company’s performance was continually declining (Gershon, 2013). Many people associate
Blockbuster’s demise to the rise of other streaming networks such as Redbox and Netflix.
Currently, Blockbuster has already filed for bankruptcy (Chopra & Veraaiyan, 2017). The
brand is likely to close its offices in the near future.