On October 19, 1985, the first Blockbuster video-rental store opened in Dallas, Texas. Blockbuster expanded rapidly, eventually becoming one of the world’s largest providers of in-home movies before eventually filing for bankruptcy in 2010. Here are 5 things you didn't know about Blockbuster...
The Collapse of the Oil Market Led to Blockbuster
David Cook, a Dallas entrepreneur, was approached by his wife about opening a video store when the oil market collapsed in 1985. Cook had been writing computer programs to manage inventory for big oil businesses, but a market collapse led to a stack of unpaid invoices. At the same time, the VHS rental market were becoming popular, and Cook thought a megastore with a large inventory might be profitable, so the first Blockbuster was born.
Blockbuster Made a Fortune on Late Fees
People are busy and don’t always do things on time, including returning their rented videos. In 2000, 16 percent, or $800 million, of the company’s revenue came from late fees. Although late fees were canceled in 2004, a customer bringing in a video over eight days late might end up paying the full purchase price.
Blockbuster Built an Amusement Park For Adults
The company’s real name was Blockbuster Entertainment with the thought of expanding its market outside of the video rental market. "Blockbuster Block Party" opened in 1994 in Albuquerque, New Mexico, which offered 60,000 square feet of motion simulator rides, movies, laser tag, and mazes which was for adults only. Although it was called a "miniature Disneyland on steroids” by the press, the entertainment center failed to capture the public’s attention.
Blockbuster Could Have Bought Netflix
In 2000, the CEO of Netflix, Reed Hastings, met with Blockbuster to see if they wanted to purchase the company for $50 million. Although it isn’t surprising since Netflix was losing a lot of money then, Blockbuster turned them down. At the time, Blockbuster was making huge profits and couldn’t conceive how Netflix could add any value to their enormously successful business. According to Forbes, Hastings was “laughed out of the room” for making the offer.
The Name of the Last Video Rented Was Ironic Blockbuster’s last video rental store closed its doors for the last time in November 2013. The last video rented was Seth Rogen's 2013 apocalyptic comedy "This Is the End". The company posted a photo of the moment on its Twitter page. And yes, the customer still had to return it.