Arty Ekema

Isn't it amazing how easy it is to watch just about anything you want nowadays from the comfort of your own home? With just a few clicks of a button you could be watching anything from the most recent episode of your favorite reality show, to an obscure foreign movie whose title you're not even sure how to pronounce. The truly amazing part is, that it wasn't really even that long ago that the way we consumed media was extremely different in ways younger generations will probably never even have the chance to experience. Back before companies like Netflix and Amazon gave us access to a near limitless catalog of content from the safety of our homes, video rental stores were THE premium source for everything in the entertainment world. Whether it was the most recent hit movie or that new video game you’d been dying to play video rental stores were the number one choice for decades. It’s kind of hard to picture now, but between 1985 and around 2007 there were literally thousands of these stores all over the world. So what happened? Well it all started with a company called BlockBuster. Back in the 80s and 90s when video rental stores were at their height, BlockBuster was the biggest by far. Founded by a man named David Cook, BlockBuster got its start in 1985 and immediately rocketed to the top of the food chain. It's funny to think now that the things that made BlockBuster a success seem kind of obvious, but at the time these ideas were considered revolutionary. You see, each blockbuster usually held over 6500 different titles which were way more than your average mom and pop rental store could ever handle, and it kept track of all of these titles digitally with a state of the art computerized checkout system. Smaller stores simply couldn't keep up, and for every one that closed, a BlockBuster usually took its place. By the year 2004 BlockBuster had over 9000 stores globally, and was raking in 5.9 billion dollars in revenue, but of course as many of you already know, this wouldn't last much longer. You see, just because BlockBuster was successful, doesn't necessarily mean that everybody liked it. By the mid-90s BlockBuster had basically cornered the market, which meant they could get away with a lot of things that most smaller stores couldn't have. For instance, late fees. BlockBuster charged extra for every day a movie wasn't returned on time, and at one point was making a total of 800 million dollars in just late fees. Of course, if a smaller store tried to pull something like this, you usually had the option of simply going to a different store with more forgiving policies. But because BlockBuster took over the market so aggressively you no longer had that option, now you either pay up, or you stick to what's on cable. Enter Netflix. In 1997 a man named Reed Hastings became so irritated with Blockbuster's aggressive late fees that he came up with a brand new way of renting movies without ever having to leave the house. Reed came up with a system in which people would pick movies they wanted to rent online, and then Netflix would ship them through the mail right to their front door. This allowed him to offer even more titles than BlockBuster and the best part; no late fees. By charging a monthly subscription service people were able to pay less to see the movies they wanted to see and they could hold on to them as long as they wanted. By the year 2000 Netflix wasn't quite where the founders had hoped it would be yet, so they offered to sell the service to BlockBuster for the low price of 50 million dollars. During the meeting with then, Blockbuster CEO John Antioco Netflix co-founder Marc Randolph noticed that Antioco was struggling not to laugh them out of the room, and in a move that still has eyes rolling to this very day, their offer was rejected. But it wasn’t just Netflix that BlockBuster needed to worry about, in 2002 RedBox launched, offering a quick and convenient method of renting movies and games while still not having to worry about late fees. Yet despite all this, BlockBuster had it's most profitable year in 2004 boasting over 6000 stores worldwide and a revenue of 5.9 billion dollars. This same year the company decided to start making some drastic changes. BlockBuster finally ended its controversial late fee policy, costing BlockBuster an estimated 200 million dollars in revenue. Around this same time BlockBuster launched "BlockBuster online" in an attempt to compete with Netflix more directly. Launching the service alone cost another estimated 200 million dollars and proved to be highly unprofitable. Most people who were interested in that kind of service already had Netflix, and of course, this is just my opinion, but I think a decent amount of the people who subscribed to Netflix in those early days almost did so out of spite for BlockBuster, and if that is the case then I doubt very many of these people would be swayed away by the same company that drove them to Netflix in the first place. Sofar around 2004 we’ve already got BlockBuster losing an estimated 400 million dollars as a result of terminating late fees and starting BlockBuster online, but for a company raking in billions of dollars that’s not necessarily an issue. It’s bad, don't get me wrong. But in most cases corporations like this can usually recover, so what happened? Well to add insult to injury BlockBusters parent company Viacom would drop the company, leaving them to sink or swim on their own, and sink they did. From the years 2003 to 2005 Forbes reported that BlockBuster had lost 75% percent of its market value, and Netflix was only getting more popular. By the year 2010 BlockBuster was already over one billion dollars in debt and filed for bankruptcy. They had gone from 6000 stores worldwide to 300 in only six years. Today, only one store remains, located in Bend Oregon. But was this always doomed to happen? Was BlockBuster and by extension, every video rental store always destined to die out in the internet era? Not necessarily. Let me tell you about a company called Family Video. Located mostly in the midwest of the United States Family Video is a movie and game rental store that still operates with over 500 stores to this day. But how have they survived? The simple answer is innovation. When it became clear that renting movies wasn't going to make the kind of money it used too, they started offering additional services like phone and tablet repair, in addition to renting out movies. The death of BlockBuster signified the end of an era. Gone are the days of browsing the aisles of your local video store, gone are the days of hoping they haven’t run out of copies of the game you had hoped to play that weekend, and while I'm not going to argue against the modern convenience of streaming, I do miss the social aspects of going with your friends to the local rental place, and picking out a movie or a game to enjoy together over the weekend. But hey, if you're up for the drive you could always head on over to Bend Oregon, and see what they have in stock.