Digital or else...

In 1998, at the height of DVD popularity, Blockbuster was offered an exclusive rental deal by Warner Bros. The deal would have given Blockbuster the rights to rent new releases before they went on sale to the general public. Blockbuster CEO, John Antioco, said no. 

In 2000, Blockbuster was approached again with a tempting offer. This time, it was from a fledgling DVD-by-Mail upstart named Netflix. Netflix founder, Reed Hastings, gave Blockbuster a chance to acquire Netflix for $50 million. Again, Antioco declined the offer, dismissing Netflix as “a very small niche business.”  

You know the rest…

Blockbuster went bankrupt. Netflix went on to collect 167 million subscribers, with a market cap of $188 billion.

It wasn’t the DVD business that elevated Netflix and sank Blockbuster. It was the former’s commitment to digital transformation and the latter’s resistance to it.

The name of the game is go digital or go the way of Blockbuster.