
In 2000, Blockbuster with 7700 stores declined to buy Netflix for $50M - craftoman
https://twitter.com/JonErlichman/status/1231670174593486851
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WheelsAtLarge
This is a common headline but Blockbuster would only have delayed the
inevitable by buying Netflix. Netflix was a money loser and Blockbuster could
not have carried it for too long before it closed it. And eventually, another
company would have succeeded with streaming. Profitable companies can't carry
dead weight for too long. Either the board will replace the CEO or the
shareholders will start to make noise and have the company change course. A
common strategy of takeover raiders is to close all unprofitable units and
goose the earning so the stock will rise. They never look at whether a unit is
a good future investment.

Blockbuster even started its own Netflix competitor but they could not spend
the money and time to make a go of it.

The only reason that Netflix is still alive is that investors believed that
eventually, it would be profitable. It took many years. Blockbuster did not
have the luxury of waiting until Netflix succeeded.

So no, the idea that Blockbuster missed an opportunity is not correct. It
never had a chance.

~~~
dwd
> Blockbuster even started its own Netflix competitor but they could not spend
> the money and time to make a go of it.

From John Antioco's telling it would have but he lost control of the company
to activist shareholders, who as you said:

> ...never look at whether a unit is a good future investment.

[https://hbr.org/2011/04/how-i-did-it-blockbusters-former-
ceo...](https://hbr.org/2011/04/how-i-did-it-blockbusters-former-ceo-on-
sparring-with-an-activist-shareholder)

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oddity
What I find most interesting about this story is that we talk about
"subscribers" for Netflix, but the service those subscribers have subscribed
to has changed (mailed DVDs, then streaming, then own content and maybe some
other steps along the way that I'm not aware of). Blockbuster expanded what
you could rent (movies then video games), they reduced restrictions on how you
could rent (removing fees iirc), they let you buy adjacent items (card packs?
candy? popcorn?), but for the most part, they still stayed within the
traditional one-time-purchase, physical-good model.

Perhaps some of this is just that Netflix survived long enough and into the
right eras to make these transitions, but I conjecture that your most
successful business model molds your management and therefore the space in
which the management can imagine new pivots.

The other direction is that the management has a certain mental flexibility
and therefore the business has a certain flexibility... which is probably
bidirectional and self-reinforcing when the ideas work. I don't see anything
that could have stopped Blockbuster from becoming the Netflix we know today
other than their management believing in the new business model(s). Perhaps
only Blockbuster management would know. Have any of them told their story?

Edit: Seems I'm just uninformed :) Blockbuster apparently had an online
service that I didn't know about. Why did it fail? Too late?

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rblatz
I always assumed it was due to the franchise model. Any solution they came up
with had to be fair to the franchisees, and in alignment with their franchise
agreements.

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bnorton
Netflix would have not become Netflix if Blockbuster had purchased them. This
notion of a missed opportunity is flawed

~~~
teh_infallible
I fully agree. Netflix is valuable now because they made some smart pivots and
executed them well. I doubt Blockbuster’s executives could have pulled it off.

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thewileyone
Remember the "rewinding" fee Blockbuster used to charge?

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drenginian
If they’d bought it they’d probably have led it to failure.

There’s a lot more to success than buying a company.

The politics of blockbuster /the “old tech” being the owner would have been
disastrous.

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sjg007
The answer is never bet against the Internet.

~~~
Melting_Harps
> The answer is never bet against the Internet.

I normally tend to agree with this sentiment, but if that were always the
case, please explain the prevalence--and quite honestly the very existence--of
services like Redbox (2002-Present).

With the advent of torrents/newsbin/High speed broad band etc... any and all
media is available in the comfort of your home, with no worries of region
blocks or another BS and yet there they are.

I grew up on the Internet and quite honestly half the fun of DLing and such
was being able to say I had already watched something to someone who had to
rely on traditional outlets: the last season of Sopranos comes to mind.

Some try to rationalize the non-tech savvyness of its target demographics
(Boomers) and that could be a part of it, but I have seen young people(looked
like young millennials or gen Z) waiting in lines at these things.

For a while I rationalized it must have been an elaborate DNM drop-scheme, but
then I met someone who said they use it regularly and was akin to a 24 hour
Blockbuster. Which seems to have left a hole in some people who never even
experienced it when it was alive and well (80-90s).

If I'm honest, a part of me still has some longing nostalgia for running into
those things wanting/waiting for a new SNES/PS game all day at school only to
be elated that I got the last one and it felt like I won the lottery.

The mom and pop ones were even funnier evoking the sounds of the chiming doors
and the rush of adrenaline you got trying to peek into the beaded curtain area
for the porn in the back as a kid. Also fumbling and wondering where you left
with the plastic cases with a 'be kind and rewind' smiley on them.

But we live in an era of convenience, and comfort creatures where none of that
is a part of the equation anymore.

~~~
sjg007
Torrents are hard to find and use and require a PC. Not to mention illegal .
Ask those red boxers if they also have Netflix.

