Netflix vs Blockbuster - Failure to innovate.
Did you know?
There is a well-known story about Netflix approaching Blockbuster for a potential partnership or acquisition, but the details surrounding this interaction have been subject to some debate.
Two alternative versions of the event claim to have happened in the early 2000s, Reed Hastings, the co-founder and CEO of Netflix, approached Blockbuster with a proposal for a partnership/acquisition.
One story suggests that Hastings met with Blockbuster executives and proposed a deal where Netflix would run Blockbuster's online rental service, and Blockbuster would promote Netflix in its stores.
The other version suggests that Netflix offered to sell the company to Blockbuster for $50 million, but Blockbuster declined, viewing the proposal as too high a price.
Regardless of the specific details, what is clear is that Blockbuster did not see the potential of the online rental and streaming model at the time, and they passed on the opportunity to collaborate with or acquire Netflix.
At the peak of its powers, Blockbuster had 60,000 employees across 9,000 stores and was worth around $8 billion.
Netflix now has a market cap or net worth of $246.90 billion as of January 31, 2024.
Ouch!
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