From blockbuster to flop show, a fascinating media story!

They say a split-second decision can make or break a company’s fortune. And there have been enough examples in the recent past to prove this point. Let’s take example of one blockbuster story – Netflix

We all binge-watch the finest shows on Netflix these days. However, not many know that Netflix would have not been even an entity if it was not for an unexpected ‘script’. Way back in 2000, Reed Hastings, the founder of Netflix had approached Blockbuster CEO John Antioco for a buyout.

What was Blockbuster?   

Blockbuster was a video-rental store, which had 9,904 stores worldwide with revenue topping $5.9 billion a year. And believe it or not, they were making half a billion in just late-fee to customers. What gets even more astonishing? Computers actually helped the company to optimize its efficiency.

Netflix begins its script using the internet

Come 1997, a startup called Netflix began changing the rules of the game with a DVD-by-mail service. It was simple, users could select and rent a movie online instead of a traditional store. However, with time, the company faced logistical challenges and a cash crunch. Apart from that, Reed Hastings wanted to use Blockbuster as a platform to expand online sales of videos and movies.  And guess what was the offer price? Just 50 million dollars for 5.9 billion dollar company.

Here’s how the plot unfolded  

A meeting was set between Hastings and Antioco. Antioco dismissed Hastings offer by calling his business model for ‘niche audiences’. Within years, Blockbuster had to shut shop whereas Netflix, which went for an IPO in the early 2000’s is today the most valuable US media company at nearly $154 billion. Now just imagine had Antioco signed the dotted line on that day. There would be no Netflix. Maybe you would be watching or streaming movies from Blockbuster Online but as they say it, the rest is history. One big lesson from this decision is that one should never underestimate any business or person without analyzing or evaluating the idea thoroughly.