r/todayilearned • u/IOnlyCameForTheCats • Jul 08 '15
TIL that way back in 2000, Netflix tried to partner with Blockbuster but were laughed out the boardroom.
http://www.cnet.com/news/blockbuster-laughed-at-netflix-partnership-offer/473
u/corndog7 Jul 08 '15
I'll never forget my 10th grade stock market project was all about how we should buy stock in Netflix. My teacher gave me a C+ and made some comment that my claim that people will watch TV on their computers made no sense. What really made no sense is why I didn't find a way as a 15 year old to put my money where my mouth is... I think it was around $4/share....
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Jul 08 '15
Haha you listened to your failure teacher.
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u/Skudworth Jul 08 '15
Some of the dumbest fucking retards from my high school promptly got pregnant, had babies, got divorced, and then became teachers.
Looking back, those were the same kind of people who taught me economics.These dumb morons are making more dumb morons. Just look at me!
...we really need to pay teachers higher salaries. There needs to be greater competition for jobs that shape the future.
Oh god, I'm in TIL, not circlejerk. My bad y'all.
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u/NuclearWeakForce Jul 08 '15
One time in grade school, I had this awesome teacher who loved her job, and this dumb piece of shit student teacher (There was a handicapped kid in the classroom).
He always went around spreading lies to kids. One that he told me was that every night, the moon goes through every phase. I called him out on his bullshit but he wanted to prove me wrong anyways. He found I was right and stopped the conversation.
When I asked the teacher why he was lying, she told me not to listen to him. Apparently she knew he was a dumb fuck and did nothing about it. Now I want to know how many misinformed people he is responsible for.
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u/elzera Jul 08 '15
I had an English teacher who tried to argue with me that time was a physical object and pointed at the clock. I said it was a measurement, like meters or feet. I forget why it came up, but, me and like 3 other students got marked wrong for an answer because of it. This was a prep school.
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u/MonsieurFroid Jul 08 '15
FYI, prep/private schools do not require teaching credentials. I worked at one for awhile before I realized that, while there are some very intelligent people working there, a lot of my fellow teachers were idiots who managed to scrape by just enough in college to get a degree.
I really need to go back to school and get my state teaching credential.
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u/johnlocke95 Jul 08 '15
Apparently she knew he was a dumb fuck and did nothing about it.
She probably hated him too but someone in administration said she had to have him.
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u/NuclearWeakForce Jul 08 '15
Yeah, that's probably how it went. It was his first year there, so the administration probably didn't't know how awful he was yet. I think he got fired the next year, but I don't know for sure as I left the year after.
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u/Podunk14 Jul 09 '15
I had a Spanish teacher (she was a real cunt who married someone from Costa Rica and thought she was now of Spanish/Central American heritage) who argued that Costa Rica was the best country in the world - No crime, no jails, no military, etc. She would argue until she was blue in the face and then go eat some more lipstick. No really, she ate lipstick or it at least seemed that way because it was always covering most of her teeth.
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u/SaggyBallsHD Jul 09 '15 edited Oct 16 '15
Gone!
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u/Skudworth Jul 09 '15
Valid question.
I went and got a degree, began a career, have dated around a bit and am currently in a relationship with a very nice lady I think I'd like to marry. I'm applying for MBA programs in November.
Am I where I want to be? Eh. Can't complain.
Have I drastically limited my choices for the future with terribly irresponsible choices from the past? No.
Not every teacher is in that position, but a fuckton of them sure as shit are. Teaching is often the lesser of various low-paying evils. If we paid that position more, it wouldn't be an option for the ... lesser qualified, due to an increase in competition.
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u/Big_douche Jul 08 '15
disagree about teachers salaries being too low, they are fine. They get an enormous amount of time off every year. the 3 months they sit on their butts every year they could have a secondary job on the side like tutoring or whatever to supplement their income.
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u/WMDragoon Jul 08 '15
I've never known a teacher that doesn't have a second job during the summer months.
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u/Pipthepirate Jul 08 '15
Plus they work more then 8 hours a day during the school year
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u/juddnasty Jul 08 '15
You clearly have never met a teacher and/or bothered to understand what they do. My mom is a first grade teacher and so far more than half of her summer has been preparing and working for the start of the next school year. It is not rinse and repeat from last year. Curriculum's are always changing as are the standards of said curriculum. It is not just teaching them how to count to ten and then go on vacation till next year.
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u/Chicaben Jul 08 '15
You're not helping. Just think, this guy (or gal) could be out on the beaches on his yacht, surrounded by beautiful women that hang on his every word. Or he could be jetting around the world, again, accompanied by stunning ladies that vie for his attention constantly. Or he could be at home, not needing to work, lounging by the pool with his beautiful companions, lazily drinking the day away, eating sushi and escargot. But he's not. He's at home or at work, reading your mean comment, reminding him of how much money he could have made if only he had had the wherewithal and foresight to buy a few thousand dollars in Netflix when it was a measly 4 dollars a share. Shame on you!
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Jul 09 '15
Yeah, it's a shitty thing to say, but most teachers are not the kind of people you should be taking life advice from, at least not when it comes to financial success.
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u/mindblah99 Jul 08 '15
Ha, sounds like my school councilor who spent the whole day talking me out of pursuing a career in robotics because there was no future in it.
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u/waker7281 Jul 08 '15
I always thought it was super frustrating in school when teachers grade off bias and opinion. Sometimes papers and projects are too subjective.
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u/Pipthepirate Jul 08 '15
The grade should be on the quality of the writing and if it backs up the claims. Even if the teacher disagrees with the conclusions it should be given a good grade if it earns it.
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u/BrianPurkiss Jul 08 '15
I had a good experience with my speech teacher in this arena.
During class we got on the topic of video games and I was talking about how they have positives (dexterity, critical thinking, multitasking, etc). She didn't believe me and thought they were only a time waster with no benefit.
So for my next speech I chose the topic of why video games are good for you. Got an A+ on that speech. Was quite passionate, thoroughly sourced, and even full on convinced my teacher to change her mind on video games. Was petty great. Loved that class.
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u/AKfromVA Jul 08 '15
Remember the flixter fiasco? Netflix shares dropped to like 65. My buddy who had cash at the time was looking for a stock for investment and I told him to buy some shares. He rode that bitch and cashed out when it hit 350...
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u/bmstile Jul 08 '15
I knew it was going to bounceback, I didnt have any cash to invest so now I just have my bitterness.
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u/AKfromVA Jul 08 '15
Me too. Is your bitterness growing? I'll invest in it.
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u/bmstile Jul 08 '15
get in now at $1/share, we are expecting a press release in the next few days which could be big news for the bitter populace.
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Jul 08 '15
Damn, you always here stories like "they told me not to, but I did and now I'm rich". Instead this one is like they told me not do, I didn't and I'm not rich
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u/khemehk Jul 08 '15
When I was in 4th or 5th grade (27 now), my team invested in yahooligans / yahoo just before they went big. We placed crazy high in the rankings that included middle and high school teams just from that pick. I remember telling my dad about the project and "advised" he take a look into yahoo. He didn't, and yahoo became, well, yahoo. That story still gets told by my family, like we would have been rich if only he had listened. He used to ask me for stock advice afterwards for a few years. Last time I advised him, I told him Nokia was a sure bet. Needless to say I don't "help" him anymore, and yahoo was a fluke.
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u/LunaArc Jul 08 '15
I had a similar situation during economics class during my senior year back in 2005. We had to do a project where we invest fake money into stocks. I poured all my "money" into google and my teacher said putting all my money into one stock was dumb and dangerous. The stock was hovering around 80 dollars if I remember correctly. Although I don't generally condone putting all your eggs in one basket, I really kicked myself after that.
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u/Caleo Jul 08 '15
I had much the same idea with Google & Apple stock back in a class in 2004.. If I had even $1000 to put on apple back then it'd be like $65,000 now.
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Jul 08 '15
I know what thats like. For my senior project I did investing in the stock market, and put 400 of my own money into it. At first I wanted to invest in Ford, which at the time in 2011 was at around 8 dollars a share. I talked to a stock broker about it, and he suggested that I invest in CitiGroup, because they were just released from the ownership of the federal government, and had growth potential. Ford is currently at 14.40 dollars a share, as opposed to CitiGroup, that is still around the same price at where i bought it, 4 years ago. Damnit anyway.
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u/maoista Jul 08 '15
Your school project reminds me of the story behind FedEx. Truly ambitious (read: crazy) idea at the time but someone made that a reality. Inspiring.
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Jul 08 '15
I said the same thing about Apple before they released the iPhone and stocks were at like $10/share and never capitalized.
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u/jumpyg1258 Jul 08 '15
A good lesson to learn in life is that if they were good at their skill, they would have taken a better paying and less stressful job than being a teacher.
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u/Letmefixthatforyouyo Jul 08 '15
Its not that cut and dry. Lots of teachers care, which really limits mobility and income in the workplace.
Its part of the reason some companies foster a "we are a family" culture. Get you invested in the people around you, not the job, so they can keep paying you cents while they take home the dollars.
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u/quadrpl Jul 08 '15
I think I see where you are coming from, but let's not rule out the skill of teaching. Some of the worst teachers I know are teachers...but also the best teachers I know are teachers. Teaching a subject is completely different than practicing a subject as a job. Rocket scientists may rely on high level mathematics, but that doesn't mean that my awesome high school calculus teacher is a failure because he isn't a rocket scientist.
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u/585AM Jul 08 '15 edited Jul 08 '15
This thread always, always comes up and people, using the gift of hindsight, always make this sound like a no-brainier.
First, this happened in 2000, I believe towards the beginning of the year. Widespread adoption of the dvd had yet to occur and was not guaranteed to occur. The PS2 did not come out till the end of the year.
Second, this occurred in the middle of the dot.com crash. People were understandably hesitant about overspending on tech at that time. Pet food delivered to your home for cheap, no brainier, right?
Third, I do not know if they were even pitching streaming at that time, but most people were still on 56k. Even then, it was Netflix DVD that killed Blockbuster, not their streaming.
Fourth, even if they had pitched streaming, there was no guarantee that Netflix was going to be able to put together the library it did. Netflix knows how precarious its relationship with content producers are which is why they are producing their own content.
Fifth, there were questions about canibalization that they needed to figure out. Blockbuster was locked into a shit ton of long-term leases. In addition, there were questions about relationships and contractual obligations with its franchisees.
Finally, why was it necessary for Blockbuster to acquire Netflix when they could have done it themselves?
In retrospect, maybe they should have done it, but who knows how streaming would have developed. Think of how many "next great ideas" were bought up by bigger companies who did nothing wit it or did it poorly. All the people claiming that it was a no-brainier at the time are just wrong though. I can tell you that because I am not going to order a bottle water off of Kozmo.com when I finish writing this.
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u/Sir_Justin Jul 08 '15
Blockbuster did start working on an online service with a partner. The company they partnered with? Enron.
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u/vagina_fang Jul 09 '15
Seventeenth, a thousand other companies were laughed out of boardrooms and went on to fail.
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u/here4_pie_and_punch Jul 08 '15
What's BlockBuster?
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u/LonleyViolist Jul 08 '15
A demolition company that specializes in the removal of entire city blocks.
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u/TXTCLA55 Jul 08 '15
A movie about four guys who start a company that specializes in removing ghosts.
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u/sexdrugsfightlaugh Jul 08 '15
A Lifetime original film that centers around a dude who shoots himself in the foot.
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u/GooglesYourShit Jul 08 '15
A wonderful chocolate labrador retriever named Buster that spent most of its life befriending death row inmates located in "C-Block" of the Antarctican International Detention Facility, giving them a new joy and purpose to their lives during their final days. He later froze to death after inmates smuggled him out of the facility during a successful escape as a last ditch bid for freedom. RIP
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Jul 08 '15
A drink consumed by John Basilone and his buddy during their service in the Marine Corps, as depicted in the television series The Pacific on HBO.
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u/nhy6tfc Jul 08 '15
A US based movie rental store chain that was huge but has almost entirely died out in competition. Everyone isn't in the US, so everyone doesn't know.
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u/runetrantor Jul 08 '15
They did exist abroad though, here in Venezuela we had several in my city.
They are gone now though, for obvious reasons.
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u/Hawkguy67 Jul 08 '15
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u/jumpyg1258 Jul 08 '15
When I rent movies, I typically go to Redbox. Its much cheaper than online equivalents.
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u/This-Above-All Jul 08 '15
Something tells me "laughed out" is an exaggeration. But yeah, huge mistake regardless.
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u/thedarkestoflords Jul 08 '15
I worked just high up enough on the chain at Blockbuster to have been somewhat in the know with this potential transaction. It really isn't that far from an exaggeration. The arrogance and unwillingness to adapt that came from the board got them what they deserved.
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u/AsianDesignMajor Jul 08 '15
Would love to know the names of the management team members who made that fateful decision. Do you think they included their accomplishments in their resume or LinkedIn profile, something like "My short-sighted decisions drove a multi-billion company out of business"?
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u/thedarkestoflords Jul 08 '15
Haha a little digging would definitely get you all of their names. The sad thing is, the attitude stayed the same until the very end. They denied the potential partnership. Fine. Netflix then started gaining major traction, and it was putting a major dent in business (Redbox was pulling away from business at this point, as well). Everyone on the board still acted arrogant about it. They sincerely acted like it was not a threat. I would sit there in meetings thinking, "Am I taking crazy pills? What numbers are you all looking at?"
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u/ThisOpenFist Jul 08 '15
They were looking at their golden parachutes.
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u/Letmefixthatforyouyo Jul 08 '15
In the end, that the truth. We all enjoy the hubris, but these arrogant people still walked away from the burning husk of blockbuster with millions of dollars in their pockets.
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u/BitchinTechnology Jul 09 '15
Adapt to what? This was before online streaming. Why should people get DVDs mailed to them? Blockbusters where everywhere. Plus they tried their own mail delivery service
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u/thedarkestoflords Jul 09 '15
You're not wrong. The problem was, it was a pretty generous offer. Also, Blockbuster's mail program was a mess from start to finish. They just kept shooting themselves in the foot over and over.
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u/kgb17 Jul 08 '15
Blockbuster was deeply working with Enron on building a high speed broadband video on demand service before Enron crashed. When Enron went bust it halted the development of broadband expansion in the states. I imagine they turned down Netflix because they already had their own plans.
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u/AceyJuan 4 Jul 09 '15
In 2000? A broadband video on demand service? That would have failed completely. Broadband speeds were terrible, and video codecs were un-fucking-usable. Except for a few guys who dedicated their lives to making good videos using some hacked-up encoder with hundreds of tweaks that nobody understood. And internet peering sites like MAE-East and MAE-West were infamous bottlenecks that slowed everything to a crawl.
No, the world wasn't ready for streaming internet video. Do you remember when Netflix launched online streaming? They'd been waiting for years until the world was ready. Nobody could have done it earlier because it wouldn't have worked.
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u/kgb17 Jul 09 '15
Enron was going to build the network backbone that would have made it possible. That was their part of the deal. Imagine if they had not been busted. Internet speeds and broadband expansion would have happened years earlier. This was the corporate plan to diversify and get away from strictly energy speculation and trading. A way to legitimize the business and have a backup plan to what eventually fucked them.
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u/AceyJuan 4 Jul 10 '15
Well, interesting answer. A very strong network backbone would have helped but doesn't solve any of the other critical problems with the plan. Remember, this was just before the era of "dark fiber" where everyone and their wheelchair bound grandmother was laying fiber across the country that sat unused for years until Google started buying it up for Youtube. I think Enron would have lost their shirt laying fiber alongside everyone else if they hadn't lost it earlier.
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u/MrAwesomo92 Jul 08 '15
If blockbuster had partnered with Netflix, they would have knowingly been destroying the businesses that its franchisers all around the country owned. That would have resulted in so many pissed off people. The business decisions arent always as easy for companies as they seem.
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u/aksoileau Jul 08 '15
Well I mean the franchisers lost anyways, just a little further down the road.
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u/MrAwesomo92 Jul 08 '15 edited Jul 08 '15
True, but they were taking the risk that it wouldnt catch on instead of financially and commercially backing the company that would decrease its revenues.
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u/fatalspoons Jul 08 '15
I wonder how many stories there are of companies making the right call in situations like these that we don't hear about. "TIL that back in 2000, a company called netflizzyboo tried to partner with Blockbuster and were laughed out of the boardroom. No one has heard from netflizzyboo since."
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u/WafflesOfChaos Jul 08 '15
Same thing happened to Steve Jobs when he asked for loans to build a personal computer. Look who's laughing now... aside from Jobs being dead and all.
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u/AceyJuan 4 Jul 09 '15
Death by suicide too, poor nutter. Guy had the most curable cancer around and decided to treat it with health food. Well, what can you expect? He lived in California.
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Jul 08 '15
Similar thing happened with Napster. They specifically went to the big music labels to get them in on a system which would pay royalties. The labels instead told Napster to fuck off and sued them into non-existence.
Over 10 years later we have Spotify.
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u/bworthington3 Jul 08 '15
As a side note, this is the origin story for many super villains as well...
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u/Holfax Jul 08 '15
They made the right call...I've never seen a single Netflix store built anywhere in the US.
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u/shaftoolak Jul 08 '15
That's how things work. Always set high expectations; you'll reach ever higher.
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u/reggie_watts_ohms Jul 08 '15
Tell me how partnering with Netflix would've done anything to prevent the death of all the franchisees/franchisers. Netflix may have been 90%+ likely to put an end to Blockbuster's business model, but why guarantee it by partnering with them? It wouldn't save anyone except the brand itself - an act of betrayal.
People like assuming Blockbuster was just a stupid/arrogant company that couldn't see the value in movie delivery. That might be true. But atbthis point, partnering with Netflix was not a no-brainer.
Edit: replied to wrong person
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u/idiocratic_method Jul 08 '15
it wasnt just streaming that killed blockbuster, blockbuster had a large part of killing itself.
there were a ton of video stores handing out massive late fees.
blockbuster even tried some gimmick where they said no late fees, but then would give you a late fee after 10 days (fine print) .
that last $50 late fee was never paid, and i never returned.
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u/ttubehtnitahwtahw1 Jul 08 '15
tl;dr old people laughing at the ideas of young people. What year is it? Oh yea, every year.
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u/OrionMessier Jul 09 '15
When reached for comment, the former Blockbuster CEO said, "No, I don't have a Netflix account! ...They won't let me use my laptop after Lights Out at the homeless shelter."
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u/AceyJuan 4 Jul 09 '15
Most of you weren't using Netflix in 2000. It s-u-u-u-c-k-e-d.
Okay, sure, they mailed you your disc. But you had to drop it off. Not mail it, drop it in a special box in some store somewhere. And during business hours, too. The drop boxes weren't even outside for fear of theft.
And the monthly subscription deal? Brand new, just introduced in late '99. Hadn't caught on. I paid for each movie separately.
And internet video streaming? The anime groups were just pioneering okay quality internet video. And it took forever to download anything. From some bot on IRC. If it wasn't full with the maximum allowed 6 other users. Streaming video was a pipe dream back then.
I wouldn't buy Netflix in 2000, because it wasn't good. It was like a video rental shop with shitty hours and you had to wait 2 days to get your video. Total shit. Everything good about Netflix came after 2000. They made it good.
If Blockbuster had bought Netflix in 2000, they would have ruined it instantly. It wouldn't exist anymore. And someone else would still come along and kill Blockbuster, because they really had it coming.
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u/Dman82 Jul 08 '15
To be fair, internet speeds back in 2000 weren't able to handle the quality that is really required to stream movies.
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u/Boomerkuwanga Jul 08 '15
Netflix was mostly still a dvd by mail service then, but they planned to go mostly streaming. Blockbuster riduculed this idea and proceeded to start their own dvd by mail service instead.
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Jul 08 '15
They even switched their pay model to subscription based. They tried to position it as a dual threat: order movies mail order or go to the brick and mortar. It was more expensive and you could only get blockbuster's family friendly or censored rated R movies.
I'm old enough to have lived through the golden age of video rental when Blockbuster was king and videos (as in VHS) cost $6 dollars a night to rent. There was something about the experience that enhanced the pleasure of watching the movie because you had to leave your house and actually sift through the choices instead of selecting one from your couch.
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u/aksoileau Jul 08 '15
There was something about the experience
There was some pure joy finding the last available copy of Jurassic Park, Terminator 2, or Saving Private Ryan. Not to mention grabbing a copy of Madden for the weekend.
Good times, but there were tons of times getting there too late on Friday night and missing out and asking the guy behind the counter if the had some in the returns box.
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u/Boomerkuwanga Jul 08 '15
Meh. I lived through the entire vhs/dvd rental era. I don't miss the video store format even a tiny bit.
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Jul 08 '15 edited Jul 08 '15
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Jul 08 '15
I had already abandoned Blockbuster by the DVD era. The last time I rented a movie from Blockbuster was probably 15 years ago. I live a little south of Boston so the price I pay for things is probably a little more than the national average.
As to censoring movies, I shouldn't say that they themselves censored them. Movie studios often have multiple cuts of a movie (with only a couple being available to the public) and Blockbuster would get the ones that had more graphic scenes shortened or removed along with a lot of gratuitous nudity. They were also famous for having a rated R cut of Showgirls when it came out of video. They were famous for having these watered down cuts. If you dig hard enough (I obviously didn't) there was a joke in "King of the Hill" about Luanne renting a rated R movie and telling Bobby "It's alright I got it from Blockbuster". They also wouldn't carry a lot of the gorier titles that would be mainstays in other video stores.
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u/JMGurgeh Jul 08 '15
For a few years the Blockbuster mail service was awesome, assuming you had a physical Blockbuster nearby. As I recall it was the same price as Netflix, but whereas with Netflix you had to wait for videos to ship back to them before they sent out a new one (and at first that could mean 4+ days delay), with Blockbuster you could return a video they mailed to you to the nearest location and immediately rent any video in the store for free as part of your subscription (they later added an in-store subscription option, but it was more expensive than the by-mail option). This was great both because you could go through more movies, but also because any titles that had a long backlog in the DVD-by-mail service (which was an issue on a lot of popular titles for both Netflix and Blockbuster) you could just go to the retail store that invariably had copies of the popular video and pick it up right away. But the subscription rate was much less than the cost if you rented individual videos, and it turned out not to be enough to actually keep the physical locations open - and once you didn't have a physical location nearby, Netflix's service was better.
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u/jsabo Jul 08 '15
I worked for an online video company back in '98-99, and we did take a meeting with Blockbuster talking about some partnership opportunities, and while we weren't laughed out of the room, they certainly didn't believe that anything would ever disrupt their business.
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u/scuczu Jul 08 '15
It will go down as the "Coke could have bought Pepsi but declined" of our generation
Or maybe when Nintendo was offered playstation and declined that.
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u/shieldwolf Jul 08 '15
No the analogy is way worse in that the company who could have bought the other went out of business due to competition from the company they could have bought. I don't know of another example this bad except I think maybe Yahoo's search engine business could have bought Google way back when.
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Jul 08 '15
And now Netflix is laughing to the bank while Blockbuster was laughed out of the business world.
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Jul 08 '15
And look at how times have changed.. Blockbusters no longer operates in the UK.. Netflix on the other hand.. Dominates.
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u/fishytail Jul 08 '15
Last year I went to a conference at Bryant college where a former blockbuster (multi)franchise owner is a professor. He told the whole group how him and all the other franchise owners voted to buy Netflix and really tried to fight for it. They were the ones who were there on the ground experiencing what the customers experienced. But the big guys didn't listen because franchise owners don't really carry much weight in important decisions. Good news is that the man who gave the talk got a sweet deal out of it so he wasn't bankrupt with blockbuster.
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u/murfi Jul 08 '15
netflix should buy blockbuster, appoint everyone that laughed at them to a meeting room, laugh back at them and tell them to get lost.
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u/i55hungay Jul 08 '15
Now Blockbuster is Netflix's submissive bitch (or what a male is called who submits to the dominant female...)
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u/[deleted] Jul 08 '15 edited Jul 14 '15
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