The $50 Million Mistake That Killed Blockbuster

Blockbuster turned down a chance to buy Netflix for $50 million. But years later, Blockbuster actually beat Netflix — and still lost its way. In 2000, Netflix is a tiny company with just 115 employees. Blockbuster has 9,000 stores. Netflix offers to sell the business for $50 million. Blockbuster's CEO laughs out loud. The meeting ends after 30 minutes. The Netflix team flies home in silence. But the story takes a strange turn. By 2007, Blockbuster's Total Access service has 3 million online subscribers. Netflix has fallen from more than 6 million to 2 million. Blockbuster has beaten its rival. So why does it start tearing down its own winner? Franchise owners revolt. The board changes. Late fees disappear, damaging the product. Then a CEO is paid $50 million as he strips the company for value. The biggest threat is now inside Blockbuster. Chapters: 00:00 One Store Left 01:49 The Empire of Friday Night 03:06 A Red Envelope 04:20 Dallas, September 2000 05:52 The Year Netflix Nearly Died 07:18 Rich, Famous, and in Debt 08:47 No More Late Fees 10:01 The Counterattack That Worked 11:39 The Boardroom Decides 13:06 A Thousand Films, Instantly 14:37 Rewind ▶ Watch next: Microsoft Saved Apple in 1997 — The $150 Million Deal Nobody Expected —    • Microsoft Saved Apple in 1997 — The $150 M...   ▶ All Boardroom Stories stories in one playlist:    • More Boardroom Stories   About the visuals: this video is illustrated with AI-generated artwork in a consistent filmic style, created for this story. It is artwork, not archival footage or photographs of the real people. A new company story every week — subscribe to Boardroom Stories.