Blockbuster Almost Beat Netflix. Here's What Really Killed It.

The story

In 2000, Netflix offered to sell itself to Blockbuster for $50 million, and Blockbuster said no. That's the famous version. The real story is stranger: a few years later, Blockbuster was actually beating Netflix. Then it walked away from the plan that was working.

This is the rise and fall of the blue and yellow giant, from a single Dallas store in 1985 to the last Blockbuster on Earth.

Three lessons

1. 1

   The famous mistake is not always the fatal one. Saying no to Netflix hurt; abandoning a strategy that was working hurt more.

2. 2

   Debt takes away your options. You can't win a long war with a short runway.

3. 3

   Never build your profits on your customers' pain. The moment they find a better option, they will leave.

Chapters

1. 0:00Intro
2. 0:51Be Kind, Rewind
3. 1:45The 800 Million Dollar Habit
4. 2:23The Meeting in Dallas
5. 3:27Blockbuster Strikes Back
6. 4:17The Bonus That Broke Blockbuster
7. 5:16The Last Rewind
8. 5:57The Last Blockbuster
9. 6:25Three Lessons
10. 7:03Outro

Sources

Every fact in this file is checked against published sources before release. See our standards.

• Inc., the 2000 Netflix and Blockbuster meeting (from Marc Randolph's account)
• CNBC, How Netflix almost lost the movie rental wars to Blockbuster
• NBC News, Hubris and late fees doomed Blockbuster
• NBC News, Blockbuster to end late fees in 2005
• NBC News, Blockbuster CEO John Antioco to leave (2007)
• Forbes, A timeline of the Blockbuster life cycle
• Roanoke Times (1994), Blockbuster and Viacom merge
• CNBC, Reed Hastings' founding story and the Apollo 13 late fee
• Deadline, Dish Network buys Blockbuster for $320 million (2011)
• CBC, Blockbuster to close remaining stores
• Visit Central Oregon, The Last Blockbuster in Bend