We are Blockbuster, Welcome to watch mojo And today we're discussing the rise and fall of blockbuster wasn't netflix.

Netflix was really the nail in the coffin for sure.

Netflix.

Netflix, netflix for this video.

We're looking at the former video rental giants, highs and lows in, it's 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 19, 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 8000 VHS tapes and 2000 beta tapes.

And then Blockbuster came along and then it was like, it's not just like a little closet with a couple of 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 cheerleader movies?

Like we don't got that buddy.

But perhaps the most revolutionary aspect was cooks 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, Hi Zana and john Milk who rapidly expanded the company.

Blockbuster had 20 stores and that caught the attention of garbage man Wayne Huizenga.

Well less a garbage man and more the ceo of waste management, the largest garbage company in the country.

High Zenga 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 us and soon after the company went international and bought out Ritz stores in the UK height of popularity.

With high Zynga's 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 challenge, 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 19 nineties.

And early aughts, look at this wall to wall entertainment.

You want entertainment carl, I'll give you entertainment.

I'm a maniac maniac.

No argument here.

Let's see their entertainment do this.

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%.

Hi Zana 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.

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 visit 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 2000 and one Blockbuster even put on its own annual entertainment awards ceremony to celebrate movies and stars loved by most people, but who were often left out of the fancy pants.

The Oscars.

By 2000 and four, Blockbuster was at its peak, boasting 9000 stores around the world.

They'd open game rush in store additions for video games and DVD trading emerging technologies.

Former president of Taco Bell, john Antioco became ceo of Blockbuster in june 1997 Sumner, Redstone was hoping Antioco could pour some of his famous hot sauce under the Blockbuster brand, Warner Brothers offered Blockbuster an exclusive deal like they're established deal for VHS stores would get new release dvds before they went on sale, but Antioco 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 john had an opportunity to require netflix.

Yes.

In 2000, Well I don't want it's um, back in those days.

Yeah, it was possible his words as they laughed him out of the room.

Antioco 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 man.

A blockbuster, he blew it four years later.

Antioco 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-2000's 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 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 anti acos large salary by july 2007 former 7 11 ceo James, Keys took over for Antioco board then hired Jim Keys away from 7 11 where he had recently turned that company around by offering free slurpees on july 11th.

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 filed chapter 11 bankruptcy with $900 million 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 delisted from the new york stock exchange.

In april 2011, dish network bought Blockbuster for $320 million 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.

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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, Sandi 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 were little.

We just love coming in here during the early days of the covid 19 pandemic, the store turned into an Airbnb where guests could have a ninety's themed sleepover.

We're gonna have pizza, will have candy, you're gonna popcorn, we have a little closet set up in the corner with all kinds of nineties clothing in it, ironically netflix began streaming the last blockbuster and the streaming service has greenlit and 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 gonna be here forever.

But sadly I think that there probably will be, you know, the last day at some point.

Do you agree with our picks?