BIFFI FEST
David Cook vs. Reed Hastings
Okay so, let’s start with a short round of questions,
Those who watch or have watched Netflix raise their hands, it doesn't matter what plan you pay for, but for everyone who has seen
Netflix hands up, of those who raised it, what is your favorite series or movie?
*People answering*
Now, who had watched Blockbuster?
What was Blockbuster? In 1985, Blockbuster became the most popular and largest video store company, specializing in movie and video game rentals through physical stores. It had everything that a good public likes, well, nice and cheap, but they say out there that Netflix dethroned him and took number one from them years ago, here is when the word rivalry comes to mind, even more when we are talking about they are involved in the world of entertainment.
Was there a real competition between Netflix and Blockbuster? Was it Netflix that killed Blockbuster?
Let’s talk a bit about Blockbuster’s beginning.
It was founded in 1985 by David Cook, When everything seemed so difficult, David Cook came up with the idea of putting everything he had left (in aspects of money) in a still unexplored niche: video stores, the project had more than 10,000 movies per location, a barcode tracking process and computerized check-out, it was the latest in technology.
"The first night we had to lock the key so that no one would enter from so many people that we had at the opening," he told CNN in 2003. The next year, he opened three more stores and a distribution center that required an investment of US$6 million.
His creature soon aroused the interest of some magnates and in 1987 an investment group led by Wayne Huizenga, owner of the Waste Management company, bought a majority stake in him for US$18.5 million. Soon after, Cook left the company after several disagreements with Huizenga's proxies.
Then, he undertook a more aggressive growth strategy. He bought local video stores, by 1988, it already had more than 400 branches in the United States and a couple of years later it exceeded 1,000 commercial points. At that time, renting a VHS was the only way to watch a movie that was no longer in theaters without having to buy it. In addition, they added the possibility of renting video games. After conquering the US market, it was time for international expansion launched in other European and Latin American countries. By then, the firm had new owners. Viacom, owner of MTV and Nickelodeon, bought it in 1994 for US$8.4 billion and five years later took it public.
What about the competence?
Marc Randolph, co-founder of Netflix, saysthat he and Reed Hastings met with John Antioco, then CEO of Blockbuster, to sell him the company for 50 million dollars, but he arrogantly rejected the offer because they never accepted their competition. What time later it would be returned to him as karma, which cost him his own company.
But Netflix on his own side also had more difficulties starting than Blockbuster, After two months of opening it was one more company, even the magnate Jeff Bezos wanted to buy it and made an offer to Hastings and Randolph of almost eight figures of dollars, but they said they were close to something and with pride, they rejected it.
Months later they discovered the way to fight Blockbuster, They created a website, that became the best internet source to get a DVD. Due to their strategy of paying for the film and then returning it to the store, they would lose 2 dollars for each film, which increased and became a debt of around 200 million dollars, they had their numbers in the red, Jhon Antioco decides to leave the company, however, the board tried to repair the errors to continue with the project but it was impossible to repair it, since it began to deteriorate and the status to decline in 2010 he officially declared bankruptcy with US$ 1000 million indebted to all its foreign branches, but after selling the part of the United States it is also in 2013 failure. Netflix had taken the lead and officially and to date it is the most famous.
Today there is only one store open in Oregon as a symbol of entertainment development.
Netflix, for its part, has more than 180 million subscribers and its shares have exceeded the ceiling of 500 dollars, being for now the outstanding winner of the current “streaming war”.
The way technology has an impact every single day in the entertainment industry makes it dependent to one another including the people who work in them, the facility for the people of not attend theaters to watch a performance.
By SofĂa González D., Step 11
DATE: Sept. 26th
Finalist to the Biffi-Fest 2023
