The story of Netflix and Blockbuster is truly incredible.
I mean wow it shows you how arrogance can sometimes cost you everything.
Blockbuster had a chance to buy Netflix for $50M back in 2000 but they rejected it and invested in one (Enron) that literally went bankrupt the next year.
I know it’s easy to judge things now but just imagine for a sec where Blockbuster would be now if they accepted that offer.
What was $50M for them? Nothing lol. They were worth like $7B at that time, it was peanuts.
They didn’t even bother to consider the possibility! They thought it was a joke.
Not only that but looks like Netflix was requesting a meeting with them for months and they finally agreed to meet em at a time and place where was physically impossible for them to go.
Sheer arrogance lol.
Funny thing Netflix turned down Amazon 2 years earlier becos they thought Blockbuster was the IDEAL solution for them to stay afloat (and crap it was!)
Netflix did mostly DVDs by mail then so this could have truly been the perfect partnership.
Instead, Blockbuster CEO’s response is now probably very high on his list of the things he wishes he’d never said lol..
“This dot com hysteria is completely overblown. Business models like Netflix and just abt every other online business are not sustainable and will never make money”
LOL!!! ..reminds me of another spectacular wrong prediction made back in 1995: “No one will ever buy a single thing online. No online database will replace your daily newspaper, no one will ever buy books or tickets straight over the internet. No CD-ROM can take the place of a competent teacher and no computer network will change the way government works” (competent teacher.. funny.. think abt Youtube! ?)
Back to Netflix, they debated them for awhile on this and then Blockbuster asked em: “If we were to buy you, how much? Give us a number”.
They said: “$50M”
Needless to say they literally laughed out of the boardroom and rejected the offer.
The meeting went downhill pretty fast with Netflix execs that went back to the airport immediately after.
Blockbuster could have easily turned things around and build an even BIGGER empire by joining forces and letting them run the online part of the COMBINED business.
Think abt it.
A MASSIVE opportunity for growth and scaling!
Instead they acted super arrogant thinking they were on top of the world and didn’t even bother to make at least a counter offer.
Today Netflix is worth something like $228B and am pretty sure they’re laughing their ass off now. ?
Blockbuster, on the other hand, closed down all of its 9,094 stores and filed for bankruptcy a couple of years later.
There’s plenty of stories like this out there it’s just crazy how they could not foresee the future. Can’t blame em, not everyone has that “sixth sense”.
Or maybe they’d have just eaten them and Netflix vanished? Who knows haha!
Life is truly crazy sometimes.
Wrapping Things Up…
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Credit: Devid Farah