Blockbuster, Netflix and DVD rental: who better reinvents themselves survives


60 million members, points of sale in 25 countries, with 4,800 stores in the U.S. alone. The figures are exorbitant, gob smacking, yet even these incredible figures didn’t save Blockbuster from bankruptcy.  Because, if you are not capable of evolving and keeping up with the times, even if a giant you can fall.

But first things first, let’s go back to 1985 when in Dallas, Texas, Blockbuster opened its first store.

Everyone thinks that the company’s founder was H. Wayne Huizenga, but he wasn’t. The real creator was David Cook, who took advantage of the sharp slowdown in oil and gas to create what became the American giant of the movie rental.
Never heard of him?
You are not the only ones; you could define him as the Pete Best of the video trade!
Cook, however, unlike the former Beatle, became a millionaire by selling the company to Viacom in 1994. The rental and sale of movies, in fact, proved immediately a booming market with good profits, and, between 1985 and 1995, the number of Blockbuster stores had reached 4800 in the U.S. alone!

From here the road to success and profit was downhill. Shops appeared in Canada, Australia, New Zealand, Japan, Great Britain, Portugal, Denmark, Israel, Mexico, Argentina and Italy. There was also an acquisition by Viacom for 8.4 billion dollars: so many zeros that the word crisis was not even contemplated in the vocabulary of the American company.

At the beginning of 2000, however, Blockbuster had found its nemesis: Netflix, a DVD rental service and video games via the Internet, which were delivered at home by mail. Legend has it that Reed Hastings, its founder, created the company after paying a fine of $ 40 for Apollo 13 which he returned late to his trusted Blockbuster.

That the story is true or not, the result remains indisputable: Netflix had started to weaken Blockbuster.

The blue and yellow giant that alone had shaken the whole of Hollywood convincing people that watching movies in the comfort of their own living room was better, found himself to be the victim, like the cinema before him, of that ” theory of new products ” that had made his own  fortune. The cinema killed by DVDs, DVDs killed by the Internet.

If to all this you add the advent of digital television on demand and Internet with its virtual stores like iTunes and Amazon, you will understand the collapse of Blockbuster. A heavy blow launched through thousands of movies from which to choose from thanks simply to a decoder, a monthly or annual subscription and a click.

Internet, pay-per-view and computer piracy, therefore, are certainly responsible for the failure of the company, but who is the real culprit? Blockbuster itself, with its inability to adapt to the latest technological standards. No innovative and competitive solutions, no customers, no profits.

Netflix, however, that only four years ago was risking failure, reorganized its video-rental service with home delivery, re-cycling itself in paid streaming site, to then widen its activities becoming a production house. In February, 2013, in fact, the operation House of Cards began, a television series adapted from Beau Willimon for the Netflix streaming service. Where is the logic? Attract new subscribers with piles of episodes and make them loyal. But above all convince the investors!

The same Beau Willimon said, “This is the future, streaming is the future. TV will not be TV in five years’ time… everyone will be streaming “.

Netflix, therefore, was capable of renewing itself, so it is still present and dynamic on the market.

And Blockbuster? Can only sadly observe the closing credits that mark the end of the film that had the main character in Blockbuster itself.

Blockbuster failure


Italian version of this article here.

Leave a Reply