Blockbuster's Self-Inflicted Wound
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Netflix didn't kill Blockbuster. Blockbuster killed itself. In 2000, Blockbuster had the
chance to buy Netflix for 50 million dollars. They laughed them out of the
room. But here's what most people miss. The real mistake wasn't rejecting Netflix.
It was what happened next. Blockbuster actually launched their own streaming service in 2004.
Three years before Netflix did. They had the stores, the brand recognition,
the customer base. Everything Netflix didn't have. So why did they fail?
Their CEO was terrified of cannibalizing their late fee revenue. Those fees made
up 16 percent of their total income. So they sabotaged their own innovation.
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