Erol Onaran
Encyclopedia
Erol Onaran founder of Erol's
TV, Erol's Video and Erol's Internet, was a Turkish-American businessman. He was born in Turkey, although he spent most of his young life in Istanbul, Turkey where he goes to Istanbul Erkek Lisesi before moving to the United States
in 1959. An electronics technician by trade, he opened Erol's, an electronics repair store in Washington, DC, in 1963.
In the early 1980s, Erol's TV began renting a handful of video cassettes at the flagship store in Arlington, Virginia. The popularity and profitability of those rentals led to the spinoff that would become the Erol's Video chain. By the late 1980s, Erol's Video would grow to become the largest privately-owned video rental chain in the United States
, with more than 250 locations throughout the mid-Atlantic. Onaran would then engage in a fierce battle with rival Blockbuster Video
before ultimately selling the chain to the company in 1990 for $40 million.
In 1992, Onaran purchased the Erol's hardware service center from Blockbuster, and with the aid of son Orhan Onaran began once again selling and servicing electronics. In an attempt to capture market share from major manufacturers by trading on the family name, the company began selling custom-built personal computer
s in 1993 to individual users, businesses, and government agencies.
In an effort to provide additional value to computer purchasers, Erol's began offering dial-up Internet service in 1995. Erol's Internet offered unlimited access to the then very basic internet for a flat monthly fee, as opposed to the "by the hour" model employed by larger Internet Service Providers such as America Online (AOL
) and CompuServe
. To raise money quickly, Erol's slashed monthly fees if customers were willing to purchase yearly contracts in advance, providing much-needed cash to fuel the company's growth. The model proved successful, as Erol's would sign up nearly 300,000 customers by early 1998. However, the company was operating at a loss even as the brand continued to grow. Needing an infusion of capital, Erol's began preparing for an initial public offering (IPO) in the summer of 1997. Paperwork filed in preparation for the IPO demonstrated just how cash-strapped the company had become: As of September 30, 1997, Erol's showed a balance of $500,000 with obligations to provide services to customers amounting to $40 million. Just two months after announcing the intention to take the company public, Onaran surprised the industry by agreeing to sell outright to RCN Corp.
, a telecommunications firm based in Princeton, New Jersey
for more than $120 million. The terms of the sale included the assumption of $40 million in operating debts. Onaran would receive $35 million in cash in the sale, as well as more than $20 million in RCN stock.
After the sale of Erol's Internet to RCN, Onaran retired from business, leaving his family to run the electronics business which was not included in the deal. His health failed in his later years due to alcoholism
. Gambling
and lavish spending reduced his wealth considerably. With debts mounting, he returned to his native Turkey, where he died October 25, 2005.
Erol's
Erol's refers to two companies, both founded by Erol Onaran, a Turkish immigrant to Virginia.Erol's, Inc. was a video rental and electronic sales and repair company founded in the early 1980s. It was sold to Blockbuster Video for roughly $30 million. Its success was widespread enough to spawn...
TV, Erol's Video and Erol's Internet, was a Turkish-American businessman. He was born in Turkey, although he spent most of his young life in Istanbul, Turkey where he goes to Istanbul Erkek Lisesi before moving to the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
in 1959. An electronics technician by trade, he opened Erol's, an electronics repair store in Washington, DC, in 1963.
Overview
Onaran would lead Erol's through a series of evolutions over the next forty years. Erol's TV achieved modest success in the 1960s and 1970s, selling and servicing color televisions and video cassette recorders in several locations throughout the Washington, DC suburbs.In the early 1980s, Erol's TV began renting a handful of video cassettes at the flagship store in Arlington, Virginia. The popularity and profitability of those rentals led to the spinoff that would become the Erol's Video chain. By the late 1980s, Erol's Video would grow to become the largest privately-owned video rental chain in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, with more than 250 locations throughout the mid-Atlantic. Onaran would then engage in a fierce battle with rival Blockbuster Video
Blockbuster (movie rental store)
Blockbuster LLC is an American-based provider of home video and video game rental services, originally through video rental shops , later adding DVD-by-mail, streaming video on demand, and kiosks. At its peak in 2009, Blockbuster had up to 60,000 employees. There are around 1700 Blockbuster...
before ultimately selling the chain to the company in 1990 for $40 million.
In 1992, Onaran purchased the Erol's hardware service center from Blockbuster, and with the aid of son Orhan Onaran began once again selling and servicing electronics. In an attempt to capture market share from major manufacturers by trading on the family name, the company began selling custom-built personal computer
Personal computer
A personal computer is any general-purpose computer whose size, capabilities, and original sales price make it useful for individuals, and which is intended to be operated directly by an end-user with no intervening computer operator...
s in 1993 to individual users, businesses, and government agencies.
In an effort to provide additional value to computer purchasers, Erol's began offering dial-up Internet service in 1995. Erol's Internet offered unlimited access to the then very basic internet for a flat monthly fee, as opposed to the "by the hour" model employed by larger Internet Service Providers such as America Online (AOL
AOL
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York. Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services...
) and CompuServe
CompuServe
CompuServe was the first major commercial online service in the United States. It dominated the field during the 1980s and remained a major player through the mid-1990s, when it was sidelined by the rise of services such as AOL with monthly subscriptions rather than hourly rates...
. To raise money quickly, Erol's slashed monthly fees if customers were willing to purchase yearly contracts in advance, providing much-needed cash to fuel the company's growth. The model proved successful, as Erol's would sign up nearly 300,000 customers by early 1998. However, the company was operating at a loss even as the brand continued to grow. Needing an infusion of capital, Erol's began preparing for an initial public offering (IPO) in the summer of 1997. Paperwork filed in preparation for the IPO demonstrated just how cash-strapped the company had become: As of September 30, 1997, Erol's showed a balance of $500,000 with obligations to provide services to customers amounting to $40 million. Just two months after announcing the intention to take the company public, Onaran surprised the industry by agreeing to sell outright to RCN Corp.
RCN Corporation
RCN Corporation, founded in 1993 and based in Herndon, Virginia, is the first American facilities-based competitive provider of bundled telephone, cable television and high-speed internet service delivered over its own fiber-optic local network to consumers in the Boston, New York, Eastern...
, a telecommunications firm based in Princeton, New Jersey
Princeton, New Jersey
Princeton is a community located in Mercer County, New Jersey, United States. It is best known as the location of Princeton University, which has been sited in the community since 1756...
for more than $120 million. The terms of the sale included the assumption of $40 million in operating debts. Onaran would receive $35 million in cash in the sale, as well as more than $20 million in RCN stock.
After the sale of Erol's Internet to RCN, Onaran retired from business, leaving his family to run the electronics business which was not included in the deal. His health failed in his later years due to alcoholism
Alcoholism
Alcoholism is a broad term for problems with alcohol, and is generally used to mean compulsive and uncontrolled consumption of alcoholic beverages, usually to the detriment of the drinker's health, personal relationships, and social standing...
. Gambling
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
and lavish spending reduced his wealth considerably. With debts mounting, he returned to his native Turkey, where he died October 25, 2005.