In 2000, Blockbuster with 7700 stores declined to buy Netflix for $50M | Hacker News Reader

In 2000, Blockbuster with 7700 stores declined to buy Netflix for $50M

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24 pointscraftoman13 comments

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.

Blockbuster had tons of cash.

> 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...

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?

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.

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

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.

AKA Yahoo effect.

Remember the "rewinding" fee Blockbuster used to charge?

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.

The answer is never bet against the Internet.

> 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.

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

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