people come in and say oh my gosh it
still looks like a blockbuster and i'm
like well of course it does we are
blockbuster welcome to watchmojo and
today we're discussing the rise and fall
of blockbuster was it netflix
netflix was the really the uh the nail
in the coffin for sure netflix netflix
netflix for this video we're looking at
the former video rental giant's highs
and lows in its over 30 years as a
company do you miss blockbuster nights
let us know in the comments
early days david cook made a living as a
software engineer in the oil industry
but when that started going downhill his
wife sandy suggested getting into the
video rental game the cooks bought the
dallas video works franchise then left
to create blockbuster video incorporated
the first store opened on october 19th
1985 in dallas texas from the outset
cook wanted his store to be different
unlike the mom and pop shops blockbuster
had a massive inventory starting with 8
000 vhs tapes and 2 000 beta tapes and
then blockbuster came along and then it
was like it's not just like a little
closet with a couple videos it became
this world of videos and the store
actually put the tapes on shelves
instead of using display cases and
keeping inventory in the back another
thing that made blockbuster stand out
was its bright blue and yellow color
scheme throughout the store they kept it
mainstream and family friendly refusing
to rent any adult films you get a call
or a person in a week
looking and there would be people you
wouldn't i'm not like thinking like
people in like a trench coat and a hat
these are like suburban dads like
looking for like where's the the
cheerleader movies like
we don't got that buddy but perhaps the
most revolutionary aspect was cook's
database expertise which allowed him to
use barcodes and keep track of inventory
digitally david cook left his company in
1987 giving control to waste management
co-founder wayne heizenga and john melk
who rapidly expanded the company
blockbuster had 20 stores and that
caught the attention of garbage ban
wayne huzzanga well less a garbage man
and more the ceo of waste management the
largest garbage company in the country
heisenga began buying out smaller rental
stores and converting them into
blockbusters like i remember walking
into the to the pacific video when the
sign was in the door saying starting
next week this specific video will
become a blockbuster at one point there
was reportedly a new store opening every
day by 1988 blockbuster had 400
locations in the u.s and soon after the
company went international and bought
out ritz stores in the uk
height of popularity with heising as
guidance blockbuster became a
multi-billion dollar company and the
number one video rental retailer and in
addition to thousands of movies and
television series blockbuster also
rented video games and gaming consoles
not a game well now it's both at
blockbuster video where the challenge
never ends blockbuster nights were
weekly occurrences for many people
especially when it came to slumber
parties and family bonding or just any
friday and saturday night blockbuster
commercials were everywhere and some of
the best were in the 1990s and early
aughts right look at this wall-to-wall
entertainment you want entertainment
i'll give you entertainment
look girl i'm a maniac maniac no
argument here let's see their
entertainment do this whoa in late 1998
early 1999 blockbuster rolled out its
rewards program offering free rentals
and giving customers even more of a
reason to come back on a regular basis
for every five paid new release movies
or games you rent in one month you get
one movie or game free after time warner
announced its plan to upgrade their
cable system in 1991 blockbuster shares
dropped 10 percent heisenga was sure
that new advances in technology were a
threat to the brick and mortar stores so
he decided to get out and sell
blockbuster to viacom for a whopping 8.4
billion dollars in 1994. we really
almost i say almost needed the enormous
cash flow
to service the debt
so strategically it made a lot of sense
and also we thought blockbuster was a
good business which the cable company
needed to finance their bid for
paramount around this time blockbuster
also explored other ventures like a
massive florida amusement park and what
were essentially arcades for adults
called block party and from 1995 to 2001
blockbuster even put on its own annual
entertainment award ceremony to
celebrate movies and stars loved by most
people but who were often left out of
the fancy pantsy oscars by 2004
blockbuster was at its peak boasting 9
000 stores around the world they'd open
game rush in-store additions for video
game and dvd trading
emerging technologies former president
of taco bell john antijaco became ceo of
blockbuster in june 1997. sumner
redstone was hoping antiochu could pour
some of his famous hot sauce onto the
blockbuster brand warner bros offered
blockbuster an exclusive deal like their
established deal for vhs stores would
get new release dvds before they went on
sale but antiocho turned it down instead
wb gave the deal to walmart which sold
the dvds at a low price blockbuster
couldn't compete with those prices later
that summer mark randolph and reed
hastings founded netflix make a list of
the movies you want to see and in about
one business day you'll get three dvds
keep them as long as you want without
late fees then when you're done look
prepaid envelopes which began as a dvd
by mail rental service it's been said
that the inspiration for the company was
a 40 late fee hastings acquired from
apollo 13 in 2000 blockbuster made one
of its biggest mistakes hastings
approached the company and offered to
sell netflix for 50 million dollars john
had an opportunity to acquire netflix
was that possible yes in the in 2000
well
i don't it's um
back in those days yeah it was possible
his words as they laughed him out of the
room anyako rejected the idea not ready
to enter the online rental space just
yet in hindsight this seems like an
insane decision however at that time
blockbuster was doing very well and
netflix was still the new kid on the
block oh man hey blockbuster he blew it
four years later anayako saw the
potential in an online market and
launched blockbuster online with a
bigger selection of titles and a lower
subscription price than netflix the
company was highly successful at first
blockbuster sweetened the deal in 2007
with total access which let customers
exchange their online rentals in store
for a free rental despite its massive
success the company lost money from the
slew of free rentals by the mid-2000s
blockbuster's biggest competitors grew
with the emergence of redbox hulu and
amazon prime video and in 2007 netflix
got into streaming and the rest is
history well not quite there's more most
people think blockbuster went out of
business because of netflix but that's
not the truth blockbuster's downfall
remember how awesome it was when
blockbuster got rid of late fees well it
may have been cool for us but the
company took a major hit late fees made
up for 800 million dollars of
blockbuster's revenue in 2000.
and with customers keeping rentals for
much longer stores were often out of
stock plus franchise stores did not have
to adhere to the policy so customers
found it confusing that some places had
late fees and others didn't this
actually led to lawsuits for false
advertising losing blockbuster even more
money they lost over 250 million in
sales overnight the cash flow of the
business was really cut in a third
basically major shareholder carl icahn
wasn't thrilled with all the big
spending on online endeavors or with
aniako's large salary by july 2007
former 7-eleven ceo james keys took over
for anyako ford then hired jim keys away
from 7-eleven where he had recently
turned that company around by offering
free slurpees on july 11. keys made
several bad decisions from the get-go
raising prices for total access and
getting rid of in-store exchanges keys
was also vocal in the media regarding
his feelings about netflix saying he's
quote confused by this fascination that
everybody has with the company the year
2010 was not good for blockbuster in
march they tried a new thing called
additional daily rates but like the no
late fees it just didn't work that same
month they issued a bankruptcy warning
and by september they'd filed chapter 11
bankruptcy with 900 million dollars in
debt blockbuster video on thursday filed
for bankruptcy protection
well blockbuster seems our eight-year
tug of war over tango and cash
has reached its conclusion in july they
were de-listed from the new york stock
exchange in april 2011 dish network
bought blockbuster for 320 million
dollars and announced later that year it
would launch a blockbuster movie pass
but it was only for dish customers
blockbuster tried to stay in the game
with services like blockbuster express
kiosks and a 28-day exclusive deal for
titles from certain movie studios but by
early 2014 the remaining 300 corporate
stores were closed and online services
were no more before we continue be sure
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legacy and nostalgia in the media the
last remaining franchise-owned
blockbusters in alaska closed in 2018
leaving one store left in america in
2020 the bend oregon store and its
longtime manager sandy harding were the
subject of the nostalgia fueled
documentary the last blockbuster since
then more and more customers have made
special trips just to visit the store
and experience the good old days just
reminds me of when my kids are little we
just love coming in here during the
early days of the covet 19 pandemic the
store turned into an airbnb where guests
could have a 90s themed sleepover we're
gonna have pizza we'll have candy you're
gonna have popcorn we have a little
closet set up in the corner with all
kinds of 90s clothing in it ironically
netflix began streaming the last
blockbuster and the streaming service
has greenlit an original comedy series
about employees working at the last
blockbuster even after decades of new
technology and an abundance of streaming
options the love for blockbuster is
still going strong so will there be a
happily ever after for this last
blockbuster on earth i would love to say
we're going to be here forever but sadly
i think that there probably will be you
know a last day at some point do you
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