World’s weirdest date night? The last remaining Blockbuster video store, located in Bend, Oregon, put itself on Airbnb for the second year in a row, offering to let people stay overnight, pop a few cassettes in the VCR, and basically party like it’s 1995.
They’re booked up for the three nights they offered. Nostalgia knows no bounds, I suppose.
The irony is that if you’re old enough to remember Blockbuster—I mean, really, really remember it—well, not too many people honestly liked it that much.
First, they swallowed up all the mom and pop video stores, then they almost never had enough copies of whatever new movie everyone wanted.
And then there were the late fees. Oh, the late fees.
The co-founder of Netflix used to tell a story that he’d been inspired to start the company after running up $40 in fees from returning Apollo 13 late to Blockbuster.
This story was not true, as it turned out, but dig down a little bit and the two companies seem to be permanently entwined. Today, one is huge (see my interview with early Netflixer-turned-business professor Joel Mier, about how Netflix bobbed, weaved, and pivoted through at least nine major business models), and the other is a relic.
But what about Blockbuster? Why didn’t it pivot? How did it really go from its peak of more than 58,000 stores in 2004, to just a single, stubborn store today?
For that answer, we turn to Ben Unglesbee, who worked at Blockbuster about 20 years ago, and who is now a writer for Retail Dive. He tackled these questions in a comprehensive article about the demise of his former employer back in 2019, titled: “Who really killed Blockbuster?”
I read all 7,000-plus words quickly when he first published, and then I got him on the phone. His theory is that it’s too simple to say that “Netflix killed Blockbuster,” and that there were actually three big factors:
Bad finances and debt. Blockbuster lost money for 12 of 14 years from 1996 to 2010, including a $4.4 billion loss between 2002 and 2006—when Netflix was still pretty small.
Retail sales. Blockbuster dominated VHS, but when DVDs took off, they were priced for sale much closer to traditional rental prices. (“They would retail them for $5,” an ex-franchisee said. “Go in a Blockbuster, and they’d want to rent it for $4.50.”)
Other competition. There were other big video chains, like Hollywood Video. But also, a former Blockbuster exec told him: “It was Redbox. It was Netflix. It was pay-per-view, Direct TV. Boy, it just came from all sides.”
Oh, and Dish Network, I might add, which ultimately acquired the intellectual property for Blockbuster. Go to www.blockbuster.com and you’ll see.
“I think maybe people just kind of took for granted that Blockbuster was already completely extinct,” Unglesbee told me. “It's like when an older celebrity dies and you're like, wait a minute, they were still alive?”
Perhaps it’s my Gen-X biases, but my sense is Blockbuster still has a lot of brand potency. In fact, I think you could argue that Dish should have renamed itself Blockbuster; at least it had more history.
“This nostalgia is kind of ironic because a lot of people at the time hated us,” Unglesbee said. “We would just be the objects of people's rage when they would come in happy to rent a movie, and then we'd tell them they owed us $10 in late fees. They would get so angry. … I think this might just be how nostalgia kind of works.”
Call for comments: Fond memories of Blockbuster, or not? And also: What other now-defunct brands do you miss?
7 other things worth your time
AirBnB’s CEO has pledged to provide free housing for 20,000 Afghan refugees. (CNN)
After a decade, former employees of Curt Schilling's failed video game studio are getting their last paychecks: well, between 14-20% of what they would have been owed, but for the bankruptcy. (PC Gamer)
Intellectual property officials in South Africa have awarded the first patent that names an artificial intelligence as a co-inventor. (Technology Networks)
Former New York Gov. Andrew Cuomo’s Emmy for his COVID briefings is being revoked after the sexual harassment scandal that led to his leaving office. (Reuters)
Spencer Elden, the man who was photographed as a baby on the album cover for Nirvana's Nevermind, is suing the band, alleging sexual exploitation. Now 30, Elden says his parents never signed a release authorizing the use of his image on the album, and that the nude image constitutes child pornography. (BBC)
Military troops must immediately begin to get the COVID-19 vaccine, US Defense Secretary Lloyd Austin said in a memo Wednesday, ordering service leaders to “impose ambitious timelines for implementation.” (AP)
Delta Air Lines CEO Ed Bastian notified employees Wednesday that they will face $200 monthly increases on their health insurance premiums starting Nov. 1 if they aren’t vaccinated against COVID-19, citing steep costs to cover employees who are hospitalized with the virus. (NBC News)
Thanks for reading. Photo credit: fair use. Want to see all my mistakes? Click here.