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Blockbuster's Rise and Fall: The Long, Rewinding Road

NEW YORK ( TheStreet) -- Before Blockbuster (BLOKA.PK) became a video store behemoth -- and, now, a firm that has filed for bankruptcy -- it was, in fact, an oil company.

That's right -- if Blockbuster were a movie, the opening scene of The Blockbuster Story would be set 25 years ago in the Dallas offices of an oil-equipment provider called Cooks Data Services.

Cooks Data, a supplier of tools and computer software to the Texas oil and gas industry, had been founded in 1978 by a man named David Cook. Cook -- who Fortune Small Business once called the video world's Pete Best -- was an entrepreneur with a penchant for building databases. After the collapse of the oil market in the mid-eighties, Cook, at the urging of his wife, decided to try his luck in the video rental market. He opened the first Blockbuster store in Dallas in October of 1985.

It was an unconventional corporate move, for sure. And critics almost immediately began to question the longevity of his "Blockbuster" model.
Blockbuster Timeline

Now more than two decades later, investors are still questioning if, at any point amid Blockbuster's tumultuous and sometimes sordid history, the company could have done something different to change its fate. For the answer to that, let's rewind the tape, and play it all back.

Act 1: Blockbuster Booms
From the beginning, Blockbuster was an immediate success -- and soon devised a model that would revolutionize the industry: With more than 8,000 VHS tapes in more than 6,500 titles, Cook's Blockbuster store was three times larger than its nearest competitor. Unlike other video chains that stored movies behind the counter, Blockbuster displayed titles on shelves. Cook kept his doors open later than traditional video stores. He used a computer system and scanner to track of tapes and ease checkouts. And in perhaps the most crucial move for future growth, Cook determined that Blockbuster would be a family-friendly destination, and he refused to stock adult films.

Cook, realizing he had something powerful in his hands, decided to completely abandon the oil industry, renaming the company Blockbuster Entertainment and issuing a new ticker on Nasdaq.
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