Did netflix really put Blockbuster out of business?
The answer? Sort of. Netflix didn't put Blockbuster out of business but they did steal the market that Blockbuster needed to move into. Blockbuster was hurting long before Netflix even came into the picture though. Management was constantly changing and struggling to keep Blockbuster a profitable business. As you can see, Blockbuster went through small and large cycles of major losses and then major profits until it eventually couldn't come back from a major loss.
the fall of blockbuster
At one point in time, Blockbuster was the undisputed video rental leader in the world. Blockbuster could have continued to be the lead video rental in the world if they weren't so full of themselves and decided to purchase Netflix in 2000 for $50 million but Blockbuster didn't think Netflix would do any damage to their business though and so decided to not purchase Netflix. Blockbuster might have been right about that if their right hand man, Enron Broadband Services, didn't go under. In 2000, Blockbuster signed a 20 year deal to deliver on-demand movies with Enron Broadband Services, a subsidiary of Enron. After this deal was created, Blockbuster's profits soared and they earned over $500 million in the first year. Unfortunately for Blockbuster, Enron filed for bankruptcy in accounting scandal and Blockbuster kissed their streaming deal goodbye. After this deal fell through, Blockbuster's profits plummet. Within 2 years after the deal fell through, Blockbuster was about 1.2 billion in debt. While they do manage to make a comeback once Blockbuster entered the online DVD rental market, Blockbuster kept making their customers angry and caused them to flee elsewhere, usually Netflix or Redbox.
The rise of netflix
Netflix is a fairly new company that has become one of the largest on-demand video businesses due to its advanced ideas. At the time Netflix was born, their services and ideas were years ahead of the major video-rental retailers such as Blockbuster. They were basically the first business to jump into online DVD rentals and became quite successful because of this reason. They stole the market that big brand names like Blockbuster needed to jump into in order to survive. Once people got word of Netflix and tried it out, majority of people never went back to Blockbuster again. Netflix also gained popularity due to its convenience, quickness and wide variety of options. As we all know, people are getting more and more lazy and with Netflix delivering the DVDs and shows right to your mailbox or directly streaming it on the internet is much more convenient than driving out to a store to rent one. Netflix is also rather quick nowadays. You simply click on a show or movie and within the minute that show or movie is streaming on your device. Also, Netflix provides customers with many more options of videos to watch. They are not limited by store space or even what is popular at the moment. They are able to house more titles, old and new, for forever which gives the customers more variety which they love.