Back when... Blockbuster almost bought Netflix
Once upon a time, Netflix offered Blockbuster to buy them and was turned down
It's crazy to think of, but Netflix wasn't always the giant it is today. Once at a time, Blockbuster was the most dominant in USA and Netflix didn't even scratch the surface
Netflix was founded in 1997, by Marc Randolph and Reed Hastings. They started out with 30 employees and wanted to do something similar as Amazon, by utilizing the internet. They first considered VHS, but decided it was to bulky and delicate to ship back and forth
Later the same year, DVD was released in the United States and Netflix found it's media to use for their pay-per-rent model. Where you could order online in the world's first online DVD-rental store and with an initial rental model, similar to Blockbuster. Where you rented one movie, with similar fees and due dates as Blockbuster
Two years later, in September 1999, Netflix introduced monthly subscription concept and in 2000 they went away from the single-rental model, they started out with. Since then, Netflix have always used monthly subscription with unlimited access as their subscription model
Netflix relied on US Postal Service for delivery of the rental DVD's and at this time, only had about 300.000 customers. They were expecting a loss of US$ 57 million in 2000
Blockbuster meeting
To try to ensure their company could live on, they had been trying to schedule a meeting with Blockbuster. Blockbuster at the time was a $6 billion giant, with more than nine thousand rental stores around the world
After months of trying to get a meeting with Blockbuster, they finally got an opening and went out to Dallas, Texas where Blockbuster headquarter was located. On the twenty-seventh floor of the Renaissance Tower, they sat down with CEO of Blockbuster, John Antioco
Carry on
In 2003 Netflix had their first year with actual profits, earning US $6.5 million profit on revenues of US$ 272 million
Netflix was considering it's next venture to be digital video-on-demand, where you could download the movie overnight and watch the next day. Then YouTube launched and they saw how popular the service was, even if the video quality wasn't that high
They went away from the solution they was about ready to launch, with downloading movies overnight and pushed towards streaming
In 2007 they launched their streaming service with 1000 titles, which is just 1% of what they could offer through DVD rental. The popularity kept growing and by 2009 they had 12.000 titles
While Blockbuster didn't manage to keep up with the transition to streaming and filed for bankruptcy protection in 2010. Next year their 1600 stores where bought by Dish Network, who closed down all corporate supported stores within a few years and only a few franchise stores remained
Today
Netflix have today over 209 million user (paid; as of July 20, 2021), 12,135 (2021) employees and is worth $228.60 billion
The final reminisce of Blockbuster
In 2019 the last non-USA Blockbuster closed its doors in Morley, Western Australia
Today only one physical store remains and is located in Bend, Oregon, United States
Blockbuster On Demand service still lives on in the Nordic countries, where you can buy or rent movies digitally. It is operated by Nuuday, who also is the current owner of the Blockbuster brand
Final words
You might still think Blockbusters decision to turn down Netflix offers made no sense, but then you're also comparing todays Netflix and todays Blockbuster
If you look at the situation at the time of the meeting, Netflix was a business in red financially and Blockbuster was doing very well. Netflix was still only doing video rental by mail and not yet started the streaming service they're know for today
Tags: #BackWhen #Netflix #Blockbuster
