20 | 11 | 2022

Blockbuster vs Netflix

Streaming into the Future: The Epic Battle Between Blockbuster and Netflix for Video Entertainment Supremacy


Blockbuster and Netflix are two of the most well-known names in the entertainment industry, and both significantly impacted how people watch movies and TV shows. Blockbuster was once the dominant video rental market, with thousands of retail locations worldwide. However, with the rise of digital streaming, Blockbuster struggled to keep up and eventually declared bankruptcy in 2010.

On the other hand, Netflix was founded in 1997 as a DVD rental-by-mail service. Over the years, the company has transformed into a significant player in the streaming industry, offering a vast library of movies and TV shows that can be streamed on demand. Netflix’s success has disrupted the traditional entertainment industry and led to a significant shift in media consumption.

Today, Netflix is one of the largest streaming platforms in the World, with millions of subscribers and a market value of over $100 billion. On the other hand, Blockbuster is a shell of its former self, with only a handful of remaining locations. The company’s decline is a cautionary tale for traditional businesses that fail to adapt to the digital landscape. At the same time, Netflix’s success highlights the importance of innovation and the ability to evolve with changing technology and consumer behaviour.

How Netflix Disrupted the Video Rental Industry and Left Blockbuster Behind

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The Rise and Fall of Blockbuster: Lessons Learned from the Battle with Netflix

Core Story

Netflix recognised the advantage of technology early on and leveraged it to disrupt the traditional entertainment industry. The company was one of the first to offer a DVD rental-by-mail service, a game-changer for customers tired of the hassle and inconvenience of visiting physical rental stores. Netflix then embraced the digital age by launching its streaming platform, which allowed customers to watch movies and TV shows on their devices instantly.

In contrast, Blockbuster was slow to adapt to the digital landscape and failed to recognise the potential of technology. The company relied heavily on its retail locations and could not see the writing on the wall as more and more customers switched to digital streaming. As a result, Blockbuster missed opportunities to innovate, such as the potential to launch its streaming platform, and instead focused on maintaining its traditional business model.

Another factor that contributed to Blockbuster’s downfall was its resistance to change. The company was slow to embrace change, even as the World was rapidly evolving. For example, Blockbuster was slow to offer online rental options and, later, slow to introduce a streaming service. The company’s inability to embrace change and adapt to new technology ultimately led to its downfall.

In conclusion, Netflix’s success was mainly due to its ability to recognise the advantage of technology and embrace change. The company’s early adoption of digital streaming and willingness to experiment with new technologies allowed it to gain a significant advantage over its competitors, including Blockbuster. On the other hand, Blockbuster failed to recognise the potential of technology and was slow to embrace change, ultimately leading to its downfall.

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Some interesting facts, statistics, and comparisons between Netflix and Blockbuster:

  1. Origins: Netflix started as a DVD rental-by-mail service in 1997, while Blockbuster was a brick-and-mortar video rental store that expanded into online rentals in 2004.
  2. Subscriber base: As of 2021, Netflix has 208 million subscribers globally, while Blockbuster’s subscribers are not publicly available.
  3. Original content: Netflix is known for producing and distributing original content, such as “Stranger Things,” “The Crown,” and “Orange is the New Black.” Blockbuster also created original content but did not gain the same recognition as Netflix.
  4. Business model: Netflix operates on a subscription-based model, while Blockbuster initially relied on rental fees for physical media. Blockbuster later switched to a subscription model but could not compete with Netflix.
  5. Global reach: Netflix is available in 190 countries, while Blockbuster is only available in the United States and a few other countries.
  6. Innovations: Netflix was an early adopter of streaming technology and was one of the first companies to offer on-demand streaming of movies and TV shows. Blockbuster was slow to adopt streaming technology and could not compete with Netflix’s head start.
  7. Market value: As of 2021, Netflix’s market capitalisation is over $237 billion, while Blockbuster’s market value is not publicly available.
  8. Competition: Netflix faces competition from streaming services like Disney+, Hulu, and Amazon Prime Video, while Blockbuster’s main competition is video rental stores like Blockbuster and Hollywood Video.
  9. Legacy: Netflix is widely credited with disrupting the traditional video rental industry and paving the way for the streaming revolution. On the other hand, Blockbuster is remembered as a symbol of the decline of physical media and the rise of digital streaming.

The Battle for Streaming Supremacy: What the Competition between Blockbuster and Netflix Teaches Us

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The Impact of Innovation on Competition: A Case Study of Netflix and Blockbuster

Blockbuster – didn’t understand technology.

Blockbuster was a chain of video rental stores popular in the 1980s and 1990s. Customers could go to a Blockbuster store, browse the selection of movies and TV shows, and rent a physical DVD or VHS tape to watch at home. Blockbuster also offered a mail-order rental service, where customers could order movies online and deliver them to their homes.

In its prime, ‘Blockbuster’ was one of the most well-known brands in the World, with over 5,000 rental stores in the US alone and more than 84,000 workers in 2004. However, despite having the resources and funding, they eventually filed for bankruptcy in 2010.

Organisations that are not using or planning to use innovative technologies, such as Artificial Intelligence (AI), Machine Learning (ML) and Natural Language Understanding (NLU), inevitably, given enough time, will join the line of bankrupts such as Blockbusters.

Technology gives you an advantage and opens new opportunities and lines of Business that haven’t been explored or available for many reasons – such as costs or profitability. Your competitors in saturated market space will recognise those benefits and expand their revenue and area of operations.

Blockbuster didn’t understand that TECHNOLOGY IS THE CORE of every organisation and paid the highest price.

Netflix – took advantage of the technology.

On the other hand, Netflix is a streaming service that allows customers to watch movies and TV shows online on a computer or various devices such as TVs, tablets, and smartphones. Netflix originally started as a DVD rental service similar to Blockbuster, but it quickly evolved into a streaming service as the technology for streaming video improved.

In simple terms, Netflix adopted a suitable business model backed by technology. They have recognised fast-growing networks – Broadband being available in increasing numbers of households. Subsequently, subscribers can watch what they want, when they want and on as many devices as possible in their own homes or on the go.
Now they use AI as their operation’s backbone and enhance the User Experience (UX) by recommending a desired list of movies.

Many organisations even now have the old IT attitude when it gets to technology. It’s perceived as a necessary cost rather than the main business enabler it needs to be. Whether the product or service is: legal document processing, an insurance policy, or overnight parcel delivery, that product now has enabled technology at its CORE.

There are a few critical differences between Blockbuster and Netflix:

  • Availability: Blockbuster was a physical store, so customers had to go to a store to browse and rent movies. Netflix is available online, so customers can access it from anywhere with an internet connection.
  • Selection: Blockbuster stores had a limited selection of movies and TV shows because they had to stock each item physically. On the other hand, Netflix has a much more extensive selection of movies and TV shows because they are streamed from the internet and don’t have to be physically stocked.
  • Convenience: Renting a movie from Blockbuster required going to the store, browsing the selection, and possibly waiting to rent. Netflix can be accessed from any device with an internet connection, and customers can browse and watch movies and TV shows with just a few clicks.
  • Cost: Blockbuster charged a fee for each movie or TV show rented, and there were additional late fees if the film was not returned on time. Netflix charges a monthly subscription fee, which allows customers to watch as many movies and TV shows as they want during that time.
  • Netflix has primarily replaced traditional video rental services like Blockbuster due to its convenience, more extensive selection, and lower cost.


We should learn from the mistakes of others and focus our actions towards AI to make and deliver considerably better services and products.
In 2000, at a meeting between executives of Blockbuster and Netflix, they had the opportunity to purchase Netflix for an asking price of$50 a million. Unfortunately, Blockbuster passed on this opportunity.

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From Physical Media to Streaming: A Tale of Two Companies, Netflix and Blockbuster



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