October 9th, 2005
Blockbusted: Blockbuster Passed on Buying Netflix for $50 Million and Went with Enron Instead
By Alice Hill
RealTechNews
Talk about bad business decisions you are guaranteed to regret. Variety is reporting that Blockbuster turned down the chance to purchase innovative rent-by-mail DVD movie rental company Netflix for a measly $50 million back in 2000. Worse still, the beleaguered retailer is closing shops to ward off chapter 11, and in the strangest news of all, the company chose to partner with Enron of all companies instead. A Blockbuster executive leaked the incredible news this week:
“We had the option to buy Netflix for$50 million and we didn’t do it. They were losing money. They came around a few times,” he recalls. Instead, in 2000, Blockbuster inked a 20-year exclusive video-on-demand pact with Enron as the energy conglom launched into telecom. Blockbuster canned the pact after nine months. Netflix is now worth $1.4 billion. Blockbuster’s market cap is about $850 million.” Source: Variety via HackingNetflix.com
Our Take: Enron? how on earth did Enron get into all this. Enron doing on-demand? Now we have heard everything.
Roy says:
Back in 2003, I remember seeing promo cards for Netflix nestled in the Blockbuster shelves. I wondered even then what was going through the Blockbuster corporate mind. I started with Netflix in 2004, after exhausting all of the Blockbuster back catalog I cared to watch. Not surprised to see them inching toward destruction. I wonder if they’ll sell off their DVD stock really cheap as they tank.
October 9th, 2005 at 10:33 pm
Alice says:
I got a free 6 month subscription to Netflix and never looked back. When the clerks at Blockbuster offered me their own version of Netflix, they would frown and look sad when I (and everyone else) would say “oh no thanks, I have Netflix.” They blew it.
October 9th, 2005 at 10:35 pm
Independent Sources says:
Blockbuster Missed Chance to Buy Netflix
According to Hacking Netflix, a new Variety story has called “Blockbusted” has a former executive admitting:
We had the option to buy Netflix for$50 million and we didn’t do it. They were losing money. They came around a few times,&…
October 10th, 2005 at 12:16 am
Lockergnome's Tech News Watch says:
Blockbuster Passed On Buying Netflix, Went With Enron, Instead
Talk about bad business decisions you are guaranteed to regret. Variety is reporting that Blockbuster turned down the chance to purchase innovative rent-by-mail DVD movie rental company Netflix for a measly $50 million back in 2000. Worse still, the be…
October 10th, 2005 at 1:55 am
Dave says:
I was always a bit advocate of DVDs via mail. Back in 2001 when I joined Netflix, there were quite a few companies vying for this new market. RentMyDVD.com was the other one I tried for a while. Netflix got it right when it branched out from two coastal return addresses to 10s, then 100s. Now it only takes 1-2 days to get the postage-paid DVDs back to Netflix, and vice versa.
Love it!
October 10th, 2005 at 10:47 am
Jerry says:
I’ve been around Netflix since the early days, thru a friend. Now have my own acount. I can’t remember the last time I went into a SuckBuster…… (How about their new convuluted return policy???)
October 11th, 2005 at 4:13 am
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