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How Netflix ended Blockbuster — and all of physical media


How Netflix ended Blockbuster — and all of physical media


It was a chilly thriveter morning in 2004. The scene was Stanley, Idaho — a city with a population of 101 and a current temperature of pessimistic 17. My boyfrifinish, who had lured me here from London, England, handed me a radiant red envelope and asked if I could drop it in the mailbox on my way into town. 

“What’s Netflix?” I asked, peering at the white letters printed on the side. “It’s DVD by mail,” he shelp. “They sfinish you movies in the mail. You sfinish them back when you’re done. Then, they sfinish you another one.” It was a revelation.

While Netflix had been growing in the US since its begin in 1998, it wouldn’t pass the pond for another eight years. For the rest of the world, movie night in 2004 still unbenevolentt a pilbleakage to the video store. As a child of the ’90s, I spent countless hours pass-legged on the floor of my local video store, scouring the rows of VHS cassette tapes for someleang new to feed my filmic obsession. 

But those loathed tardy fees sucked up my confineed pocket money as I hoarded cassette tapes for multiple seeings. This new system — helderly onto a movie for as prolonged as I wanted with no penalty — felt revolutionary. Little did I understand, a much hugeger revolution was brethriveg.

Fast forward to 2024, and there’s more “encountered” useable to me on a stick than in all the Blockbusters in London. I can access pragmaticly any show or movie ever made anywhere with equitable the press of a button (and possibly a acunderstandledge card number). It’s a far cry from the physical effort of the pre-streaming era: countless trips to the video store, normal battles of will with the VCR to sign up every episode of Buffy the Vampire Slayer, and clarifying TV catalogings in magazines and newspapers. (Much difficulter than it sounds.)

The shift from physical to digital media uncovered up a treacertain trove for film nerds enjoy myself. Almost everyleang, everywhere can be accessed instantly. Yet, a pang of nostalgia lingers for the way it employd to be. Sometimes, a little more effort originates the reward that much more endelightable.

The internet — and the birth of streaming video it allowd — alterd everyleang about how we watch and even what we watch. But I’d argue that the moment the video store and physical media began to die came in 2004, with the birth not of streaming but of another mail-order DVD service: Blockbuster Online

The world’s hugegest video store rental company, Blockbuster, was as much of a cultural icon in the 1990s and 2000s as Netflix is today. Much enjoy Barnes & Noble did to the self-reliant bookstore, Blockbuster blew minuscule, local video stores out of the water by stocking dozens of copies of the tardyst movies thraw canny negotiations with the movie studios. (It guaranteed them to sell cassettes for $1 a imitate instead of $65 each in return for a slice of the rental revenue.) 

Netflix, unbenevolentwhile, was a bootstrapped beginup that had tried and flunked to sell its movie-by-mail rental business to the huge boys. In what has now become a alertary tale taught in every business school, Netflix’s Marc Randolph and Reed Hastings were literassociate chuckleed out of the room by Blockbuster execs.

By 2004, Blockbuster had over 9,000 physical stores in the US and a revenue of $5.9 billion. But it was acutely alerted of the increasing competition from Netflix, which now boasted a million subscribers. That year, it begined Blockbuster Online. Then, it did the unleankable — it scrapped its expansively unfamous but untamedly profitable tardy fees. Combined, these two shifts cost the company $400 million. Wilean a year, it had lost 75 percent of its taget cherish; wilean six, it was prohibitkrupt.

There are plenty of theories as to why this happened, but Blockbuster’s ousted CEO John Antioco says it wasn’t the elevate of Netflix that caemployd the descend of Blockbuster; the company imploded from wilean. The trouble begined becaemploy of worry of competition, but Antioco argues Blockbuster could have still flourished in a Netflix world. Unfortunately, Blockbuster’s primary spreador, Viacom, didn’t consent. It selderly its 80 percent sget and set the company up for its downdescend.

This directs to an fascinating alternate universe theory: if Blockbuster hadn’t panicked about the internet and flunked to pivot to streaming, could it have set up a future where physical media remained relevant? As it went, Blockbuster’s death left a movie-watching void that companies new and set uped jumped into, hurrying the shift from physical to digital. Netflix begined its streaming service in 2007, adhereed speedyly by the set uping of Hulu by NBC and News Corp – compriseing TV shows to the streaming join. In 2011, Amazon Instant Video (the precursor to today’s Prime Video) reachd, and the rest, as they say, is streaming history.

Even what remained of physical media eschewed brick and mortar for the less pricey chooseion of the US Postal Service. The Disney Movie Club (which begined in 2001) grew in famousity by presenting discs packed with extra features, behind-the-scenes write downaries, and more for families to finishlessly rewatch. When I had kids around 2008, I was lured into the cartel-enjoy service with a bundle of free Disney DVDs, then tied down to a monthly buy. 

A back-of-the-napkin approximate shows I dropped proximately $600 on Disney movies over my children’s createative years. (Anyone recall the Disney Vault? A genius concept that made me spfinish a lot of money I shouldn’t have.) The Movie Club finassociate shut down earlier this year, and those DVDs are sitting in a drawer collecting dust now that I can stream most anyleang on Disney Plus. While its streaming service didn’t begin until 2019, Disney’s bcontent pivot to digital was the final nail in the coffin for physical media. Once the Hoemploy of Moemploy gave in, the game was up.

But the internet didn’t need to end the video store. If Blockbuster had regulated its pivot with more grace, some semblance of that physical browsing experience might have lingered into the 2020s. Scrolling Netflix equitable doesn’t contrast to wandering the aisles in search of a secret gem or tapping into the experience of the classic video store clerk.

Obviously, enjoy everyone else, I’ve happily traded tardy fees and reminders to rethrived for a immense library of encountered I can access from my couch. It’s a level of convenience that would have truly blown my mind back in that chilly Idaho thriveter. But couldn’t we have had it both ways? I guess we’ll never understand. My local Blockbuster is now a thrivee bar.

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