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How Netflix Destroyed Blockbuster [Infographic]

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In a very short window of time Netflix has changed the way we pick and consume movies and laid its primary competitor to waste. Check out this infographic for an interesting look at the consumer shift.

It wasn’t so long ago that Blockbuster’s blue and gold awnings were synonymous with movie rentals. The last decade, as the above infographic highlights, has been a brutal beat down for the rental giant. It’s hard to believe that Blockbuster turned down the chance to acquire Netflix for a mere $50 million (a tiny fraction of what they now owe creditors).

How Netflix Destroyed Blockbuster [Daily Infographic]

Jason Fitzpatrick is a warranty-voiding DIYer who spends his days cracking opening cases and wrestling with code so you don't have to. If it can be modded, optimized, repurposed, or torn apart for fun he's interested (and probably already at the workbench taking it apart). You can follow him on if you'd like.

  • Published 05/23/11

Comments (23)

  1. Cheryl Stoy

    I think BB destroyed itself with all the late fee nonesense it refuse to abandon for years.

  2. Casey Palmer

    I don’t think they’re to be counted out quite yet. With them being aquired by Dish, I think they may have a chance and their most recent “policy” changes are “interesting.” I do feell they should provide clemency for those out there with fines from 10-15 years ago would be nice.

  3. dcj2

    Another lesson from the “Physical Media is Expensive” curriculum. BB *had* to have late fees to keep pace with the cost of supplying physical DVD’s. Each extra day a customer kept a DVD was a day someone else couldn’t rent it, losing revenue. The short term solution would be to provide more DVD’s but after the 30-40 day surge of interest in a new release, then you’re stuck with 10’s of thousands of units nobody wants. They tried turning that surplus into revenue by selling the used DVD’s but that was hardly worth the cost of the display bins. Bottom line is digital media is the only way to meet the public’s fickle demands for content without going broke. Obvious in hindsight, but a painful lesson for some.

  4. Louis Payton

    I agree that BB has nearly, if not totally, destroyed itself. Late fees and being over priced hurt them but the knife in the heart is BB just not keeping up with technology. They could have adjusted their program way back and been a leader still.

  5. Warhol's Frankenstein

    Maybe Karma IS a mother f-er… Blockbuster put every mom and pop video shoppe in the tri-state area out of biz, with lackluster service, content edited version rentals, and *sigh* no adult section.
    Also, every rental needed to be ground down in the disc dr. before it would play on my oldschool dvd player… I’ve never had that problem with netfix discs since 2007. I say good riddance and good day sir!

  6. vtzete0

    BB and their late fees… who’s laughing now?

  7. David

    They also refused to rent to people who did not have credit cards, which told a group of potential customers: “you are too much trouble to take money from”

  8. Mike

    As much as Netflix would like to take credit I disagree. I tried Netflix and thought their lack of new content sucked! Who wants to rent reruns?. I think BB off’d themselves due to poor business practices. FWIW…

  9. Mitch Bartlett

    I wouldn’t say that going to pick out a movie by hand is prehistoric. People are always lined up at the grocery store to use the Redbox machine.

  10. Legatus

    Redbox killed BB, the studios will kill streaming movies or choke them into brain damage.

  11. Anonymous

    Once again, I think we are witnessing revisionist history here. At the very least, it’s obviously one-sided.

    Just for starters, can anyone say “Red Box”?

    Just what is this propaganda trying to get us to believe? Are we to believe that Netflix has single handed beat Blockbuster? Or maybe the goal was to get us to remember that there’s really only one choice for entertainment rental. Why is there no mention of any other content provider like Redbox (which was started by McDonald’s!)?

    Why do the authors of these propaganda pieces seem to think that everyone has an un-throttled high speed Internet connection? Why can’t they consider the millions of people who still use dial-up connections or the fact that those people can’t even use services like Netflix?

    Could it be that Microsoft is once again trying to re-write history for some reason?

    Just where does HTG get this stuff anyway? Or did I miss the point here and skewed history IS the point?

  12. mx023

    We used to have a blockbuster, then a redbox was installed on the other side of the Kroger that BB was attached to. A couple of months later BB moved out, just to be replaced with a movie STARZ. confusing to say the least, but oh well.

    yea DISH’s acquisation of blockbuster is rather interesting though…

  13. Larry

    90% of movies sucking killed Blockbuster. Hollywood killed BlockBuster.

  14. ADWheeler Photography

    If anything progress killed Blockbuster.

  15. AbbaDabba

    I agree that Blockbuster really alienated many customers with their late fee ‘scheme’. To them, it was a revenue enhancement tool and some stores were very aggressive in charging those fees. At one point, I had to request physical return receipts to show that I had returned the movies because the employees were putting the returns on a shelf and not processing them until the next day (which I believe was by design) to enhance revenue. Do this to enough people, and you start to lose customers. Not only do you lose them, but you give them a really bad attitude about their franchise. When Blockbuster offered mail rentals, I never even tried them because the sour taste of prior treatment far outweighed any savings or other advantage of doing business with them. So, good riddance, Blockbuster. You screwed us out of lots of money. Now take your medicine.

  16. Hamburger

    We never had to deal with blockbuster. We only had to deal with Hollywood Video. They went out of business real fast where I live and I believe they sold out nationally as well and have disappeared. I heard of redbox before i ever tried netflix and most people still use redbox over it (here that is, not speaking nationally). Majority of people in this region only have access to 512 internet which sucks for streaming netflix. All the video rental chains have gone out of business and redbox has sprung up at the small local market, maverick gas stations, walmart, mcdonalds of course, and other businesses. To say netflix singlehandedly brought down blockbuster is bogus. Here at least redbox did a lot more damage to rental stores.

  17. Devu Patel

    Their customer service was lousy. I was supposed to get coupon if you sign up for certain deal. I would never receive it despite of sending several emails and phone calls. I even mentioned that time that I am canceling my membership because of this and still things were the same. No wonder why they closed.

  18. j Jones

    I agree with the point that lack of technology offed them. The store here has a huge inventory compared to redbox, but contrast the rental model:
    Redbox, you reserve a movie on line, and go straight to the box and get it. Since there are no hourly employees (besides the stocker) you can charge less.
    Blockbuster, you don’t know what they have in stock till you get there. It’s a physical store with physical shelves, which means a public library sized force of hourly employees to pay for. Then there’s the shopping; you have to do this because you didn’t know they were out of stock, but it builds bad faith. Then there’s the line and Blockbuster’s outdated inventory software, which has trouble keeping track of movies AND purchasers. It’s maddening to want to rent a movie and have to make a trip just to see if it’s available.
    If they had only allowed a convenient way to browse, reserve and advance purchase their inventory they could have shortened their lines and relieved a lot of customer headache.
    This all comes down to the personalities and character of a few executive decision makers who were afraid of new technology, and were convinced their salaries were safe. It’s happening in industries all over the world.

  19. argent

    Dave does realize that netflix wont rent to people without a credit card either, Right? And all this stuff about netflix propaganda are you serious they didn’t really talk about all the other choices out there cause in terms of position now netflix is the only one that really took over yeah red box is out there but do you really think they are making the billions of dollars BB was and netflix is now making and of course there are all the free options out there like Hulu, crackle, ect… but any of those small companies are only filling much smaller areas of entertainment and granted I personally use Hulu, crackle, netflix, and crunchy roll to get everything i want for a decently cheap rate I would like to see netflix grow larger yet and be more the only place i have to go then just the primary. For those without unlimited high speed i understand that red box is a half decent choice but (and i’m not sure if it’s just the ones around me) out of 4 red boxs in the different places i go they barely ever have something I can’t get anywhere else, and by that i mean that i can even get the dvd from netflix before they are usually available from a red box (by me). for only $8 a month i get a movie every 4-6 days i watch it that night and put it back in the mail in the morning. I would even take the convenience of delivery with the library over that limited selection.

  20. appsbyaaron

    Now if Netflix would add actual watchable content…I am a stream-only subscriber and I watch RSS feeds of new stream-only releases and it is quite disappointing.

  21. Paperback Writer (and Reader!)

    So streaming video killed the rentable star? ;)

    Netflix and Redbox are by and large only useful if you like Hollywood’s recent offerings (i.e. anything released in the past 10-15 years, which usually includes a number and the word “Sequel”). I actually still use my VCR and won’t give it up for anything — most of the films I watch are either classics or other older ones I have on tape; I don’t watch TV shows, and haven’t for years; also, I haven’t been to a theater since around the time Dan Quayle flunked the spelling bee. ;) Call me time warped, but if I want to watch a GOOD movie I’ll stick to my VHS of “Casablanca” or “Apocalypse Now” and forget about this streaming nonsense. DVDs are where I stop — a pox on Blu-ray for what it’s “worth” (more $$$).

    The studios should slow down a bit when it comes to technology and focus more on creating quality content rather than jumping aboard the Next Big Gadget Trend like spoiled 3-year-olds opening their gifts on Christmas morning. You can keep your $8/month subscription plans and overpriced devices that a person needs to learn a foreign language just to watch a freakin’ commercial on. I’ve got all my stuff VCRed from the HBO free weekends they used to offer in the ’80s and ’90s and that’s where I’ll stay! You won’t catch me Redboxing/Netflixing “Transformers Part 10” or “Avatar 8” or whatever the TV networks also think passes for quality entertainment these days (“CSI Middle Earth,” “Law & Order Mayberry” and whatever reality-TV junk would cause a rational, discerning viewer to look into “Keeping Up With the Kevorkians”). Tiger Blood, anyone? Hollywood is “losing!!!” when it comes to putting out original material that isn’t just a rewrite/remake of something else or yet another Big Brother/Survivor/American Idle Idiot clone! :(

    (Not surprisingly, if this were 1927 I’d probably be dissing the advent of “talkie” cinema too…) :)

  22. Jeff

    I always get a kick out of whiners and criers who complained about and are still complaining about Blockbuster late fees. These are the same people who were appalled when they were charged for returning video tapes without rewinding them.
    When you rent something for a set period of time, you have entered into an agreement or contract. If you break the agreement or contract, you pay a fine. If you rent a car for a week or a motel room for a nite and then keep the car for 2 extra days or stay an additional nite or two at the motel, are you entitled to do so for no charge? Of course not!
    Blockbuster lost customers because they constantly pestered them to buy candy, or join their Rewards club, or some other such up sell program. The overpricing of their movies also contributed to their downfall.
    Please stop the constant whining about being charged for keeping a movie beyond the period of time you rented it for. If you didn’t want to pay late fees, you should have gone over to Netflix where you can wait up to a month or so to rent first run movies. Blockbuster also tried offering multiple day rentals and the same people who were chronically late before still couldn’t find the time to stop by and drop their movies off on time.
    Man up already and take responsibility for your own actions or lack of action, which is why the movie was late in the first place!!!!!

  23. Chad

    Blockbuster didn’t put every mom and pop video store out of business. The CONSUMER did. The consumer made a choice to shop at Blockbuster. And why are people complaining about their late fees? You overdraw your bank account…you get a fee. Late on your credit card…another fee and maybe even higher rates on top of that. Why should BB be any different than any other corporation in asking its clientele to be responsible?

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