The Time Netflix Threw Blockbuster a $50 Million Lifeline
And Blockbuster said no
Netflix is the largest streaming company in the world and one of the largest entertainment companies in general. But there was a time when it desperately needed help to survive.
The company turned to Blockbuster to help.
Netflix co-founder Reed Hastings was inspired to help found the company after incurring a late fee from Blockbuster. He wasn’t mad at Blockbuster, it was his own fault. But he thought he had a better idea for renting movies: pay a monthly subscription fee and get as many movies as you want.
Taking down Blockbuster was going to be hard. It was so hard that he turned to the “if you can’t beat them, join them” logic. He set up a meeting with Blockbuster in 2000 and offered them a deal to buy Netflix for $50 million.
They were laughed out of the room.
At the time, Blockbuster was worth over $4 billion and had nearly 10,000 stores around the country. It was so rich and successful it could hardly think straight.
Blockbuster had other ideas, anyway. It partnered with Enron Broadband Services, a subsidiary of the energy behemoth that would surely never fail.
