The days of standing in line waiting to pay for your Friday night video at Blockbuster are over. That’s right, the video rental company has filed for Bankruptcy last summer and has now put itself up for sale for the embarrassing starting price of $290 million. A new infographic from Online MBA Programs shares some interesting stats in favor of the idea that Netflix played a major hand in the downfall of Blockbuster.
Before we get to the infographic, lets flash back to August, when Blockbuster declared bankruptcy and I asked, “Did web video bankrupt Blockbuster?” Back then, a little over half a year ago, a company spokesperson said, “We have every reason to believe we will come out of the recapitalization process financially stronger and more competitively positioned for the future.” It doesn’t look like things have gone according to plan. Although Blockbuster began a rentals-by-mail and streaming service belatedly in order to fight against competitors like Netflix, they didn’t come on strong enough or soon enough. It was a battle between old technology and new technology, and it looks like new technology won out in the end.
I should point out that Netflix didn’t take down Blockbuster single-handedly. I think that similar streaming services like Hulu Plus had something to do with it as well. That being said, Netflix is definitely the most successful of these Blockbuster-replacement services and has been steadily gaining traction over the years. They started out as a DVD rentals-by-mail service and business has been booming ever since they introduced a streaming subscription service as well. Blockbuster isn’t the only one feeling threatened by Netflix. Paid television services are also losing subscribers to the cheaper streaming site. HBO is holding out on providing Netflix with content because of the implications it would have for HBO’s subscriber base.
One of the most interesting stats on the infographic (which we’ll get to in a moment, promise!) is the fact that, “Back in 2000, Blockbuster declined several offers to purchase Netflix for a mere $50 million.” The offer was definitely not to shabby for a company that was, at the time, bringing in billions of dollars in revenue. Blockbuster is certainly hitting themselves for not jumping at the offer, which may have seemed irrelevant and unimportant at the time. In other interesting facts, did you know that the number of Netflix subscribers in the United States and Canada is equal to the population of Australia?!
Check out the info graphic on ‘How Netflix Destroyed Blockbuster’ below, and let us know what you think. Is Netflix the future of entertainment? Will they take down any other businesses on their rise to the top?