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Mark Line is pleased with his small domain, a corner of the video-rental business, the city of Atlanta. As district manager for Blockbuster Midwest LP -- a "limited partnership" with Blockbuster Video -- he is responsible for the entire metro area; and right now, locally and nationally, the firm is the star attraction of a, well, blockbuster of a market.
This was not always so, and herein lies a pretty fair story. Blockbuster Video appeared on the horizon a little more than two years ago like a tall, dark stranger in some mercantile horse-opera. All the props were in place: a wild frontier in a state of chaos, a cast complete with heroes and villains, a vision, and a quest.
The tale began in Dallas in 1985 with David Cook, an executive who was producing software for the oil industry. When the bottom dropped out of the Texas economy, he went in search of greener pastures and, on the prompting of his movie-buff wife, looked into video rental. What he found was a fragmented, confused landscape with too many players who, for the most part, offered poor selection and even poorer service.
Cook had happened upon an industry still in its squalling infancy, unruly but with enormous potential.
Currently, more than 60,000 video-rental outlets are open around the country, ranging from warehouses to closets -- a vendor of some sort for every 400 citizens. More than half the households in the United States have at least one video-cassette recorder. In the dollar column, this adds up to revenues topping $5 billion annually, with no single company claiming a significant share.
Cook and his wife researched the market and immediately identified its major problem -- selection. Consumer surveys revealed customers could not get their first choice half the time, a retail disaster. The first of many innovations Cook would introduce was offering almost double the number of tapes of the competition.
Cook opened the first Blockbuster store in Dallas in 1985, and it was an immediate success. Within months, there were two stores, then three; for David Cook, the Texas skies must have seemed very bright.
But a dark cloud loomed. Just as Cook was about to make a stock offering to build up operational...