This is the story of BlockBuster's impressively fast rise, but also it's impressively fast fall...

Chapters:
00:00 BlockBuster Nostalgia
00:28 What Went Wrong?
00:48 Year 1985, BlockBuster Founded
01:12 Year 1987, David Cook Leaves
01:32 Year 1988, BlockBuster is Number One
01:41 Year 1990, One Thousand Stores
01:51 Year 1997, Nail In The Coffin
02:06 Netflix is Founded
02:34 How Netflix Was Different
02:50 Year 2000, The Offer
03:29 Why Turn Netflix Down?
04:06 Year 2010, Bankruptcy!

Transcript:
BlockBuster video stores!
Remember them?
It was THE place to be on a Friday night!
A seemingly unlimited range of movies to choose from, delicious snacks at the counter, and an easy-to-understand system for renting media.
Once worth over $3 billion with OVER NINE THOUSAND stores worldwide, this massive retailer had essentially died by 2014.
So, what went wrong?
Well... the short answer is competition.
But it was actually a little bit more complicated than that!
In fact, if not for one fatal decision made by those in power at Blockbuster, things might have turned out very differently indeed!
But lets start at the beginning:
Blockbuster, formerly known as Blockbuster Video, emerged from humble beginnings.
In 1985, David Cook founds the business as a single home video rental shop in Dallas, Texas.
Unlike most video stores at the time, which were small-scale operations with limited selections, Blockbuster stocked around 8,000 tapes displayed on shelves and introduced a computerized check-out process.
It was a huge success straight away, and he quickly expanded, adding three more stores in the following year.
In 1987, he sold part of the business to a group of investors that included Wayne Huizenga, founder of Waste Management
Later that year, Cook leaves Blockbuster and Huizenga assumed control of the company.
Under new leadership, Blockbuster embarked on an aggressive expansion plan, acquiring existing video store chains and opening many new ones.
By 1988, Blockbuster had become America’s leading video chain, with approximately 400 stores and they weren't going to stop there.
Then comes the early 1990s, and Blockbuster is already celebrating opening its 1000th store and expanding into the overseas market.
Things were seemingly going very well!
But now we've arrived at 1997
1997 was a year that created many things
The McDouble cheeseburger
This song...
DVDs
Me
and the nail in the coffin for BlockBuster
Netflix.
I don't need to explain what Netflix is like today...
But did you know that when Netflix started, it's primary business model was a rent-by-mail service?
Instead of visiting a video store, all a customer needed to do was select the movie they want, wait for it to arrive by mail, and send it back after enjoying it using the same method.
It was a convenient alternative to the hassle of visiting physical stores, and just like BlockBuster, interest would grow rapidly.
In the year 2000, Netflix founders Reed Hastings and Marc Randolph would offer to sell their online rental business to BlockBuster for a mere $50 million dollars.
Fifty. Million. Dollars.
Wow.
Now, I will point out that $50 million in the year 2000 is worth about $91 million today due to inflation...
But $50 million?!?!
Can you guess how much Netflix is worth today?
Approximately $300 billion!
Perhaps the most fatal decision BlockBuster could have ever made was saying "N'ah you're alright" to this offer.
Imagine if Blockbuster had accepted!
Netflix would have become Blockbuster’s online arm, and the course of entertainment history might have been different!
Why did they say no?
They were way too slow to adapt to emerging tehnologies, labelled it as a temporary trend, and clung to the traditional idea that physical video rentals would continue to thrive forever.
Netflix also had a month-to-month subscription service, allowing unlimited DVD rentals for a fixed fee. Blockbuster didn’t believe this model would work effectively.
But also at the time of the offer, Netflix WAS growing its user base, but it wasn't yet profitable.
Blockbuster executives simply failed to see the potential and ultimately turned down the deal.
Over the years, Netflix would of course grow to absolutely dwarf BlockBuster, and by 2010, Blockbuster finally filed for bankruptcy, while Netflix’s annual net income soared to $161 million.
The once-mighty giant had fallen, and the very last Blockbuster store now stands in Oregon, a nostalgic relic of a bygone era.
Netflix reported a income of $5.4 billion in the year 2023, and they're not stopping anytime soon...

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Thanks for watching!

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