Okay, I want you to do something for me. Just,
you know, close your eyes for a second. Let's
do a little time travel. All right, I'm with
you. Go back to a Friday night. Let's say it's
1999, maybe 2002. You've had a long week. You're
finally in the car, or maybe you're in the back
seat of your parents' minivan, and you pull into
that brightly lit strip mall. You walk through
those double glass doors, and it just hits you
instantly. The smell. The smell. Yes. It's that
incredibly specific mix of, what is it, ozone
from the Kiwis, carpet cleaner, stale popcorn.
And the warm plastic from the VHS cases. The
warm plastic, yes. It's a sensory trigger that
I think is hardwired into the brain of pretty
much anyone over the age of 30. It really is.
It's almost Pavlovian. You smell that and your
brain immediately signals, okay, work is over.
The weekend has officially started. Exactly.
And then you have the whole ritual. You rush
to the new releases wall, scanning for that one
copy of the Matrix or Titanic that isn't behind
one of those little rented out signs. Right.
And you're elbowing other families out of the
way to get to it. You are. Maybe you grab a box
of snow caps or raisinets at the counter. I mean,
for a solid two decades, that blue and yellow
ticket stub. That was the absolute center of
the entertainment universe. It was complete cultural
dominance. Absolute, unquestioned dominance.
But if you open your eyes and you look at the
world today, that entire empire has just evaporated.
It's gone. I mean, we are talking about a company
that at its absolute peak, this is in 2004, had
9 ,094 stores. Globally. 9 ,000. They employed
84 ,300 people. 84 ,000 people. That's bigger
than the entire population of Santa Fe, New Mexico,
just working for a video store. Exactly. And
today, what's left of all that? There is exactly
one franchise store left on the entire planet.
Just one. In Bend, Oregon. From over 9 ,000 to
one. That is... It's honestly hard to even comprehend
that level of collapse. And that's really what
we are unpacking today, because the easy narrative,
the one everyone, you know, repeats at dinner
parties is, oh, Netflix came along, streaming
happened, and Blockbuster was just this big dinosaur
that was too slow to notice. Right. The classic
technology killed the beast story. And while
technology obviously played a massive role, that
is such an oversimplification. It actually misses
all the most interesting, the most dramatic parts
of the story. I have a feeling you're going to
tell us that Blockbuster was actually way more
high tech than any of us give them credit for.
They were. This isn't just a story about streaming
versus physical media. This is a story about.
incredible corporate hubris it's a story about
internal civil wars that literally tore the company's
leadership apart and it's a story about specific
agonizingly painful missed opportunities that
had almost nothing to do with bandwidth and everything
to do with vision okay so we're gonna dig into
that yeah we are we're gonna look at the corporate
history the financial filings the leadership
struggles that turned a multi -billion dollar
juggernaut into well a single tourist attraction
in Oregon I am so ready to dive in but before
we get to the fall we have to talk about the
rise because i think most people myself included
probably assume blockbuster was started by some
movie buffs who just you know loved cinema and
that is the very first misconception we need
to just clear out of the way the origin of blockbuster
has almost nothing to do with movies it has everything
to do with oil and gas databases oil okay you
have to explain that connection that makes no
sense So we have to talk about the founder, a
man named David Cook. And he was not a Hollywood
guy. He wasn't a film school grad. In 1978, he
founded a company called Cook Data Services.
Cook Data Services. And his business was supplying
software and database management services to
the oil and gas industries in Texas. He was a
data guy, a mainframe guy. He thought in terms
of efficiency and scale. So how on earth do you
go from drilling for oil? to renting out VHS
tapes. Well, to put it simply, his oil software
business tanked. It wasn't successful. But his
wife, Sandy Cook, was actually the one who suggested
the video business. She saw the potential there.
So David Cook, being a data guy, takes a look
at the video rental industry in the early 80s.
And what does he see? I'm guessing. Just a lot
of mom and pop stores with like index cards and
really chaotic shelves. Precisely. It was a completely
fragmented, totally inefficient mess. The stores
were small, the selection was limited, and everything
was tracked by hand. Cook realized he could apply
his background in managing these massive databases
to the problem of video rental. So he didn't
see movies. He saw inventory units. He saw SKUs.
He saw inventory units that needed to be tracked
efficiently across a large network. He basically
saw it as a logistics problem, not a cinema problem.
So Blockbuster was a big data company disguised
as a video store. Right from the very beginning.
That is the perfect way to put it. While the
local store down the street was using a shoebox
full of handwritten index cards, Blockbuster
was using mainframes and barcodes from day one.
This was absolutely revolutionary for that industry.
And that's what allowed them to scale up so massively.
It's the only thing that made it possible. The
very first store, which opened in Dallas on October
19, 1985, had 8 ,000 VHS tapes and 2 ,000 beta
tapes. That way, 10 ,000 tapes. Yeah. In a single
store. In 1985. 10 ,000 tapes. That must have
just completely blown the competition out of
the water. My local store had maybe 500 on a
good day. It did. And here's a fun little design
note for you. Cook actually tried to join an
existing franchise first, a company called Video
Works, but he left because they wouldn't let
him use his own interior design scheme. No way.
Let me guess. The blue and yellow. The blue and
yellow. He had this vision for the branding,
the torn ticket stub logo, everything. They said
no. So he went out on his own. That's wild. It's
just wild to think that a video works had just
said, sure, David, you can paint the walls blue.
Blockbuster, as we know, it might never have
existed. History turns on these tiny little moments.
But Cook was really just the spark, the rocket
fuel that came from somewhere else or rather
someone else. A man named Wayne Huizenga. I know
that name. He's the waste management guy. Right.
The garbage empire. He is. He was a co -founder
of Waste Management. An associate of his, John
Milk, happened to see one of Cook's early blockbuster
stores and was just floored by the efficiency
of the model. He saw the barcodes, the computers,
and he brought Huizenga in. So now we have an
oil data guy and a garbage mogul running a movie
business. It sounds like the setup for a bad
joke, but it was a lethal combination for business.
Huizenga didn't know a thing about movies, but
he knew logistics on a massive scale. And he
knew the Ray Kroc model. The McDonald's model.
The McDonald's model of aggressive, systematized
expansion. He brought that industrial scale thinking
to video rental. They set a goal to open a new
store every 24 hours. Every single day. That's
insane. That's not just aggressive. That's a
conquest. It was a blitzkrieg. They just rolled
across the country. They bought up regional rivals
like Major Video, Aeros, Sound Warehouse. They
didn't compete. They just consumed the market.
And at the same time, they were making a very
specific branding choice that set them apart.
Yes. They decided to be family friendly. Right.
No adult section. Exactly. No adult films. Now,
you have to remember, a lot of independent stores
made a significant chunk of their revenue from
that back room, you know, behind the beaded curtain.
True. Blockbuster refused to stock it. And that
decision made them safer the suburbs. Parents
felt comfortable dropping their kids off there
on a Saturday afternoon. It was a brilliant marketing
move. It was the complete Disneyfication of the
video store. It was. But they also faced threats.
Believe it or not, in 1989, Nintendo actually
tried to sue to stop video game rentals. Really?
Yes. They lobbied Congress to ban game rentals
outright, arguing it was piracy and would kill
game sales. Wow. I remember renting Nintendo
games at Blockbuster all the time. That was huge.
If Nintendo had won that lawsuit, it would have
wiped out a massive revenue stream for them.
A huge one. But Blockbuster fought it in court
and they won. And that victory basically paved
the way for game rentals to become a central
pillar of their business for years. OK, so by
the early 90s, they're just this unstoppable
force. Completely. But here is where the first
kind of genius moment of foresight comes in.
Wayne Huizinga sells the company. He gets out
at the top. He sells to Viacom in 1994 for $8
.4 billion. $8 .4 billion? That's a great exit.
But why did he sell? Did he just want to cash
out? This is the really fascinating part. Our
sources indicate that Huizenga actually foresaw
the threat. Even back in the early 90s, he was
worried about the rise of cable TV and specifically
video on demand. No way. In the early 90s. He
looked at the future, saw that technology might
eventually make the physical tape obsolete. And
he admitted he didn't know how to solve that
future tech problem. So he sold at the absolute
perfect peak of the market. Wow. So the guy who
scaled it up essentially predicted the crash
20 years before it happened and walked away with
billions. That is honestly, that's some pretty
savvy business. It is incredible foresight. So
Viacom buys them. They needed Blockbuster's massive
cash flow to help finance a bid for Paramount.
And under Viacom's ownership, we enter the second
phase, the era of the economic engine. This is
where the business model shifted again thanks
to Sumner Redstone at Viacom. Okay, let's unpack
the money side of this. Because renting a movie
for three or four bucks, it doesn't seem like
a way to build a multi -billion dollar empire
unless you have some kind of trick up your sleeve.
The trick was something called revenue sharing.
See, the old model is actually pretty painful
for a video store. The pre -blockbuster model.
A store had to buy a VHS tape from the studio.
A copy of a new hit movie might cost that store
$65, maybe even more. $65 for one tape. So you
had to rent it out. What, 20 times just to break
even on that one copy? Exactly. And that is why
your local mom and pop store only had maybe five
copies of a big new release. They just couldn't
afford to buy 50 copies at $65 a pop. Okay, so
how did Viacom change that? They used their Hollywood
clout to broker a new kind of deal. Blockbuster
would get the tapes from the studios for a very,
very low upfront cost, sometimes just a few dollars,
almost nothing. But in exchange, they would give
the movie studio a cut of every rental fee, usually
around 40%. Oh, I see. So the studio becomes
a partner in the rental business. They're betting
on volume. Correct. And because that upfront
cost was so low for Blockbuster, they could afford
to just flood the shelves. They could stock 200
copies of Titanic. They launched that huge guaranteed
in stock campaign. I remember that. If they didn't
have the new release you wanted, you get a free
rental coupon or something. Right. And this was
the move that absolutely crushed the remaining
competition. The little independent stores couldn't
get these deals. They were still paying full
price for tapes while Blockbuster was getting
them by the truckload for pennies up front. It
was game over. This also had to have changed
how we browsed for movies, right? Yeah. I feel
like the store layout itself started to shift
around this time. It did, absolutely. The entire
store was redesigned to funnel you like a salmon
swimming upstream directly to the new release
wall. That's where the money was. It wasn't about
discovering some obscure 70s classic in the back
corner. No, it was about homogenizing film taste.
It was about watching what everyone else was
watching because that's what Blockbuster had
500 poppies of. It created the Blockbuster culture,
not just as a store, but as a media consumption
habit. And it clearly worked. From a financial
perspective. It worked like a charm. So by 2004,
they reached their absolute peak. They spin off
from Viacom. They're an independent public company
again. Over 9000 stores. Billions in revenue.
They look completely and totally invincible.
But 2004, I mean, that's right around when the
first cracks start to show, right? Yeah, okay.
Because we have to talk about the what -ifs,
the massive missed opportunities. And there's
one big, red, streaming -sized elephant in the
room. The Netflix refusal. The big one. The year
is 2000. Netflix is a tiny, fledgling startup.
They're just doing DVD by mail. Reed Hastings,
the founder of Netflix, flies to Dallas to meet
with Blockbuster's leadership team. He makes
them an offer. What's the offer? He proposes
selling Netflix to Blockbuster for $50 million.
$50 million for Netflix. I mean, Blockbuster
probably spent more than that on their blue and
yellow carpet in a year. Probably. And the Blockbuster
executives, according to Hastings, basically
laughed them out of the room. They just laughed
at him. They didn't see the value. They thought
it was a tiny niche business. Their thinking
was. People want to go to the store. They want
the instant gratification of grabbing a movie
and watching it tonight. They don't want to wait
three days for a DVD to show up in the mail.
Okay, to be fair, in the year 2000, internet
speeds were garbage, and waiting for the mail
was kind of annoying. But still, looking back,
ouch. It is the ultimate ouch moment in modern
business history. But I want to bring up a different
missed opportunity, one that people rarely talk
about. And this one actually proves that Blockbuster
wasn't just ignoring the future. OK, I'm intrigued.
Have you ever heard of the Enron deal? Enron,
as in the massive accounting fraud, spectacular
collapse of the energy sector. Enron, the very
same. But before they imploded in the late 90s
and early 2000s, Enron was investing billions
of dollars in building out a broadband and fiber
optics network. Right. I remember that. In 2000
and 2001, Blockbuster signed a 20 year exclusive
deal with Enron to create a video on demand service.
Wait, what? In 2000? That's years. Before YouTube
even existed. That's way before Netflix started
streaming. Years before. The plan was to stream
movies directly over Enron's high -speed fiber
optic cables right into people's homes. Blockbuster
did see the digital future coming. They absolutely
knew physical media wouldn't last forever. So
what happened? Why didn't we all have Blockbuster
On Demand boxes next to our TVs in 2002? Two
big reasons. First, Enron had the pipes, but
Blockbuster really struggled to get the digital
rights from the movie studios. The studios were
terrified of digital distribution back then.
They thought it would just lead to a piracy nightmare.
And the second reason? Well, the second reason,
it was Enron. Right. Their partner famously imploded
in a massive corporate scandal. The whole deal
collapsed. Enron went bankrupt just a short time
later, and Blockbuster's early shot at streaming
just vanished. But it shows that the narrative
of... Blockbuster was clueless and didn't know
streaming was coming is just false. They tried.
They just bet on the wrong partner and arguably
the wrong technology closed fiber optic cables
instead of the open Internet. That is fascinating.
So it wasn't blindness. It was just. Really,
really bad execution and bad luck. Exactly. And
that theme, bad execution and crippling internal
conflict, that brings us to the real cause of
death. Because the fatal blow didn't come from
Netflix on the outside. It came from a civil
war on the inside. This is the part of the story
I really didn't know much about. So who were
the combatants in this internal civil war? In
one corner, you have John Antioco. He became
the CEO in 1997. He's a sharp retail guy, came
from Taco Bell and PepsiCo. He understood the
customer. And in the other corner, you have the
activist investor, the legendary Carl Iken. Iken
is a huge name, a corporate raider type, right?
He's known for being, let's say, aggressive.
He gets a position on a company's board, and
he pushes for changes that maximize shareholder
value, and he wants it now. Okay, so set the
scene for me. It's 2005. The company is now public
again. Antioco knows the business is in trouble.
He identifies two huge problems that are killing
them. One. Customers absolutely hate late fees.
Two, Netflix, with its subscription model, is
starting to really steal their customers. The
late fees were the absolute worst. I'm pretty
sure I still owe them money. I remember racking
up like $40 in late fees for one movie and just
being too embarrassed to ever go back to that
store again. And you weren't alone. It was the
number one customer complaint by a huge margin.
So Antieco makes a bold move. He launches the
No Late Fees campaign. Which sounded amazing.
It was a great headline. It sounded great, but...
And here's the classic blockbuster problem. There
was some very tricky fine print. It wasn't really
no fees. If you kept the movie for more than
eight days past its due date, the system automatically
converted the rental into a sale and it charged
you the full retail price of the movie. What?
So I rent a movie for $4, keep it a week and
a half too long, and suddenly I bought it for
$25. That's exactly what happened. And if you
returned it after that, they would refund you
the price, but they'd subtract a hefty restocking
fee. That feels... That feels really deceptive.
It felt so deceptive that 48 states sued Blockbuster
for false advertising. 48. They had to pay millions
in settlements and issue a flood of coupons.
It was a PR disaster. But, and this is the weird
part, it actually started to bring some customers
back. People liked the idea of no late fees,
even if the execution was flawed. Okay, so Antioco
is trying, maybe clumsily, to fix the customer
relationship. What about the Netflix problem?
This is where Anciogo actually gets brilliant.
In 2007, he launches a program called Blockbuster
Total Access. This was the hybrid model that
Netflix could not touch. Tell me how it worked.
So, you subscribe to Blockbuster Online, you
pay a monthly fee, just like Netflix, you get
your DVDs in the mail, but, and this was the
killer feature, when you're done watching a movie,
you can take that DVD from the mailer to any
physical Blockbuster store, drop it on the counter,
and you get a free in -store rental. Right there
on the spot. Oh, that is good. That is really
good. Because the most annoying part of Netflix
back then was the turnaround time. You had to
mail it back and wait two or three days for the
next one to arrive. This gave you instant gratification.
It perfectly combined their new online business
with their biggest asset, their 9 ,000 physical
stores. It was something Netflix couldn't compete
with. And it worked. How well did it work? They
started gaining subscribers like crazy. They
were adding them faster than Netflix was. Reed
Hastings, the Netflix CEO, was reportedly terrified.
He even approached Antioco again to propose a
partnership or a merger because he felt so threatened
by total access. They were winning. They finally
figured it out. They had Netflix on the ropes.
They were winning the war for customers. But
they were losing the war for the balance sheet.
And this is where Carl Icahn enters the ring
with his boxing gloves on. Let me guess. This
whole free in -store rental thing was very, very
expensive. It was incredibly expensive. Every
time a customer swapped a movie in -store for
free, it cost Blockbuster about $2 in lost revenue.
They were losing millions of dollars, betting
that they could crush Netflix first and then
raise prices later. It's a classic tech startup
strategy, right? Burn cash to acquire users and
build a moat. It is. But Blockbuster wasn't a
Silicon Valley startup. They were a publicly
traded retail company with shareholders who demanded
quarterly profits. And one of those shareholders
was Carl Eichen. And he didn't like the cash
burn. He looked at the numbers and said, you
are setting money on fire. He argued that the
company was bleeding to death. He wanted to kill
total access, cut costs, focus on profitability
in the stores and pay out dividends to shareholders.
He waged a very public, very nasty. proxy war
against Antioco. And who won that fight? Aiken
won. In 2007, he got his allies on the board
and he successfully pushed Antioco out. Antioco
left with a massive severance package, but he
was gone. And Aiken brought in a new CEO to execute
his vision, a man named James Keyes. And what
was Keyes' background? Was he a tech visionary?
A media expert? He was the former CEO of 7 -Eleven.
A convenience store guy. A convenience store
guy. And his strategy reflected that background
perfectly. He immediately rolled back total access.
He raised the prices for the online rentals.
He effectively killed the one program that was
actually beating Netflix. But what did he focus
on instead? He wanted to double down on the physical
retail experience. He wanted to sell more popcorn,
more candy, more merchandise. He wanted to make
the stores entertainment destinations. He famously
downplayed the threat from Netflix, saying that
Blockbuster's real competitors were Apple and
Walmart. So right at the exact moment when the
entire world was pivoting to digital and streaming,
they brought in a guy to focus on selling more
Slurpees and DVDs. That is the tragedy of this
whole story. This is the specific moment Blockbuster
died. It wasn't in 2010 when they finally filed
for bankruptcy. It was right there in 2007 when
the board, led by Aiken, chose short -term quarterly
profit over the long -term survival strategy
that was actually working. That is just... It's
heartbreaking. Yeah. It's like watching a car
crash in slow motion where the driver actually
have a map to safety, but the passenger grabs
the steering wheel and drives them straight off
a cliff because it's a shorter route. That is
a very, very apt analogy. And after that, it
was just a death spiral. In 2008, in a move that
I can only describe as pure desperation, Blockbuster
tried to buy Circuit City. Circuit City, the
electronics store that was also... Very publicly
going out of business at the time. Yes. Analysts
at the time called it two drowning swimmers trying
to save each other by grabbing onto one another.
That paints a very vivid picture. The bid was
eventually withdrawn, but it just showed a complete
lack of vision. They were trying to build a bigger
retail fortress just as the entire concept of
physical retail was crumbling. By 2010, the debt
was just... insurmountable they owed nearly a
billion dollars they filed for chapter 11 bankruptcy
in september 2010 and that's when the vultures
started circling the carcass well one big vulture
swooped in dish network they bought the company
out of bankruptcy in 2011 for about 320 million
dollars which is just It's pennies on the dollar
compared to that $8 .4 billion valuation back
in the 90s. It's a rounding error. And Dish had
a plan, at least theoretically. They wanted to
use the Blockbuster brand for their own streaming
service, which they called Blockbuster MoviePass,
to compete with Netflix. Did it work? Not at
all. They never really committed to it. It gained
no traction. And they were also very interested
in the company for its wireless spectrum rights.
By early 2014, Dish announced it was closing
all of the remaining corporate owned stores.
And that just left the franchisees, the independent
owners. Yes. The corporate entity was dead. But
the brand itself lived on in these small pockets
where local owners were trying to keep the lights
on one rental at a time. Before we get to the
very last one standing, I want to talk about
some of the weird tangents in Blockbuster's history.
Because looking through the source material,
they tried some really wild stuff. They weren't
just in the U .S., right? They were global. Oh,
they were a global empire. But their very American,
family -friendly model didn't always translate
well. Take Japan, for instance. What was the
issue there? A couple of things. First, Japanese
homes are generally much smaller than American
suburban homes. They just didn't have the space
for the massive superstore footprint that Blockbuster's
model demanded. But the bigger issue was cultural.
Okay. In Japan, adult entertainment pornography
accounted for about 35 % of the entire video
rental market. It was a huge piece of the business.
And Blockbuster, with its family -friendly policy,
wouldn't stock it. They flat out refused. So
they were entering this massive market with one
hand tied behind their back. Their local competitors
just stocked everything the customers wanted
and completely crushed them. Blockbuster had
to exit Japan in 1999. That makes sense. You
can't impose your corporate morality on a market
that clearly wants something else. What about
the U .K.? I feel like Blockbuster was huge there
for a while. It was massive in the U .K. They
bought a big chain called Sidovision, which was
branded as Ritz, and they dominated the high
street. But ultimately, they suffered the exact
same fate as the U .S. branch. They entered administration,
which is the U .K. version of bankruptcy, twice
in 2013 before finally disappearing. Okay, here's
one I saw that I had no idea about. Discovery
Zone. Ah, yes. Discovery Zone. The indoor playground
with the tubes and the ball pits and the constant
smell of disinfectant. Blockbuster owned that.
In the mid -90s, yes. They invested heavily and
eventually took control. It was part of this
grand vision they had to be an entertainment
complex company, not just a video rental company.
I had no idea. I just remember getting serious
rug burn on those slides. It was another attempt
to diversify that just burned through cash and
ultimately failed. Discovery Zone went bankrupt
in 1996. But if you think that's weird, let me
tell you about the Blockbuster Block Party. The
Block Party. What on earth was that? This was
a wild experimental concept they tried in Albuquerque
and Indianapolis in the mid -90s. I want you
to imagine a giant... windowless building the
size of a city block. Inside, you have laser
tag, fancy restaurants, motion simulator rides,
and huge lounge areas for adults to hang out.
So it was like a Dave & Buster's but run by Blockbuster.
Essentially, yes. It was their attempt to build
an adult entertainment complex. Not in the Japanese
sense, but in the Night Out for Grownups sense.
It was a colossal failure. It just showed that
they had all this cash and all this ambition,
but they just couldn't figure out what they wanted
to be. A total identity crisis. Exactly. they
a tech company, a retail store, a theme park
operator? They never knew. And that identity
crisis brings us finally to the present day,
the strange afterlife of the Blockbuster brand,
because it just refuses to die. We have to talk
about Bend, Oregon, the last Blockbuster on planet
Earth. It is such a fascinating phenomenon. As
of 2019, it's the only one left. And it's become
this. This pilgrimage site for nostalgics, a
tourist destination. I've seen the pictures.
They sell their own merchandise. And they have
the Russell Crowe memorabilia, right? Yes. That
is a hilarious detail. The TV host John Oliver
bought a bunch of Russell Crowe's movie props,
including his jockstrap from the movie Cinderella
Man, and he donated it all to one of the last
blockbusters in Alaska. When that store finally
closed, the items were sent to the store in Bend.
That is just beautifully surreal. And didn't
they do an Airbnb thing a few years ago? They
did. In 2020, right in the middle of the pandemic,
they listed the entire store on Airbnb. You could
rent it out for the night for a 90s -themed sleepover.
What did that entail? You got to sleep on a pull
-out couch in the middle of the aisle surrounded
by thousands of VHS tapes with an endless supply
of snacks and a big TV. That sounds incredible,
honestly. But there's also a weird financial
afterlife to the company, right? Or something
about a zombie stock. This is one of those bizarre
market anomalies that could only happen in our
current era. The corporate entity of Blockbuster
didn't technically vanish. It became something
called BB Liquidating Inc. It's just a shell
company with no assets, no business, nothing.
Okay. But during the meme stock craze in 2021,
you know, with GameStop and AMC shares of BB
Liquidating suddenly surged by thousands of percent.
Why? Why would anyone buy stock in a dead company?
Who knows? Nostalgia. Confusion. Maybe algorithms
gone haywire. For a brief shining moment, people
were pouring money into a company that effectively
didn't exist anymore just because of the power
of that name. And the website came back recently,
too, didn't it? Yes. Just last year, in 2023,
the Blockbuster website reactivated with a cryptic
message. We are working on rewinding your movie.
And their official Twitter account is still active,
making jokes about working on the new Blockbuster.
Do you think they're actually planning some kind
of comeback? Or is it all just a marketing stunt?
It's likely just brand maintenance, you know,
keeping the trademark alive. But in this world
of endless reboots and nostalgia plays, who knows?
Maybe a blockbuster branded streaming service
with a cool retro interface could actually find
an audience. I would subscribe to that in a heartbeat.
OK, so let's bring this all together. We've gone
from the oil fields of Texas to the last stand
in Oregon. When you look at this whole epic arc,
what is the big takeaway for you? I think the
summary is this. Blockbuster started as an innovative,
data -driven company that used technology to
build a monopoly and crush its competition. But
when the next great technological shift came,
they didn't die because they were blind or stupid.
They died because of internal sabotage. They
saw it coming. They had the Enron deal for streaming
in 2000. They had the total access program that
was beating Netflix in 2007. They had the map.
Exactly. They had the technology. They had the
strategy. What they lacked was the corporate
will to suffer short -term financial losses for
long -term survival and gain. Carl Eichen and
the board wanted to keep the quarterly earnings
high and the stock price stable. And in doing
so, they sacrificed the entire future of the
company. It's a lesson for every major business,
really. You simply cannot... Cost cut your way
to innovation. You cannot. And sometimes the
safe bet, which for them was just focusing on
their core retail business, is actually the most
dangerous, most reckless bet of all. I want to
leave our listeners with one final thought to
mull over. Yeah. Just imagine an alternate reality.
Imagine a world where Carl Icahn doesn't get
involved, where John Antioco stays on as CEO.
Total access is allowed to keep growing, burning
cash, but crushing the competition. It is a very
plausible alternate timeline. In that world,
we aren't all sitting around saying Netflix and
chill. We're saying blockbuster and chill. The
blue and yellow app is on every smart TV in the
world. And maybe, just maybe, you'd still be
able to run out to a corner store on a Friday
night and rent a video game and grab a box of
Raisinets at the counter. One can dream. Thanks
for listening to this deep dive. We'll see you
next time. Take care.