Everything You Really Need To Know About Blockbuster's Bankruptcy

Yes, this is a gross oversimplification, but you know… whatever.


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  1. DarrenO says:

    Blockbuster failed for many reasons. Overpriced late fees. Lack of customer service. Falling behind the on-line rental curve and NOT buying Netflix for cheap when they had the chance. They deserve to fail and go away. I won’t miss them!

    • DariusC says:

      I’m just pissed I didn’t invest in netflix back then.

    • taney71 says:

      I forget about them having a chance to buy Netflix. That was a very stupid decision. Blockbuster thought it would be cheaper to just create an on-line presence and drive Netflix out of business. That worked out really well for them.

      • Fineous K. Douchenstein says:

        It’s always easier to buy a potential competitor who already has a user base and infrastructure pre-laid than it is to waste gobs of money to try and build a system from scratch. I’m sure all the golden parachutes have already flown, anyway.

    • Donathius says:

      Sucks for them that they didn’t take the opportunity to buy Netflix, good for us though. Netflix is known for their awesome service – Blockbuster would’ve killed that.

    • Griking says:

      My opinion on the who thing is meh

      I never cared about Blockbuster enough to like or hate them.

      Reading some of these comments could make a person believe that Blockbuster raped their daughters.

    • Alessar says:

      Blockbuster’s movie selection really went down hill. So often I’d be looking for a smaller movie they’d only have 1, checked-out copy of and a wall of some big budget junk like Godzilla that was mostly in stock.

  2. georgi55 says:


  3. MacGyver says:

    This picture is really worth 1000 words. At least.

  4. Ben Popken says:

    This rules.

    • minjche says:

      It’s quite trendy.

    • human_shield says:

      Really Ben? Because if my local Blockbuster goes out of business, I’ll have nowhere to get a movie if I suddenly want to watch Caddy Shack after I get off work.

      • minjche says:

        Caddyshack is available for instant streaming through Netflix.

        • Mechakoopa says:

          Not in Canada yet, probably why the Canadian branch of Blockbuster is still around.

        • human_shield says:

          Except that you need a monthly Netflix subscription. I had one until they switched to the Silverlight video player and the movies are so choppy they are just unwatchable. And it would need to be wired into a TV. Or I would need to buy an extra box. No thanks. Netflix doesn’t work for everyone.

          • Conformist138 says:

            I hated Silverlight for a bit, too, and bitched about the switch, but it’s TOTALLY fixed now. Seriously, it’s awesome (to the point where, until you said that, I had forgotten I disliked it before). The only problem is if your connection is messed up since it won’t let you buffer beyond a certain point. Now I’d say Silverlight is one of the better and least bogged down video streaming plugins. Many Microsoft programs make me want to shoot my monitor (Windows Media Player makes me want to cry just trying to locate the proper menus and options), but this time they really came through. I’m thinking that Netflix and their clear dedication customer service and quality may be a big reason Silverlight was so improved.

            Plus, there ARE still niche video rental stores out there, they’re just not the giant chains. A single store, run well and in a good location can still survive. It’s the mega-chains that are hurting now that demand has dried up. Too big to fail? Too big to survive!

          • minjche says:

            I thought it would be implied that when I said “it’s on Netflix” that along with that would be “since Netflix is a subscription service, you need to be subscribed to use it”.

            Regardless, thanks for reminding me that to use Netflix you need to have Netflix!

  5. Pheo says:

    Couldn’t you make a similar chart with Redbox? I have been a longtime Netflix subscriber, but I still occasionally went to Blockbuster for impulse rentals, high-demand new arrivals, etc. After Redbox came out, I never visited Blockbuster or Hollywood Video again.

  6. mbd says:

    Good riddance, I hope the shut the whole chain down.

  7. Awesome McAwesomeness says:

    +1 zillion

  8. apple420 says:

    Not being able to accept credit cards in a store is a problem. When I tried to use a gift card at two stores yesterday they couldn’t accept it because it was raining. They said they lose their satellite connection. Some areas it must rain a lot. Not being able to take credit cards when it rains is not a great situation.

    • RobbyA says:

      They didn’t accept the gift card because they knew they were filing for bankruptcy today, and probably won’t have to honor any more gift cards at all…

      • dvdchris says:

        That is a lie. There is no impact to customers over the bankruptcy. Unless you count more new releases and money spent on store operations.

  9. TBGBoodler says:

    We have a local video rental chain nearby and we used to rent VHS tapes from them all the time–back when that was how we all did it. They had a small store PACKED with amazing videos. They had a section for “cult movies,” “staff favorites,” “critics’ recommendations,” etc. The tapes (and then the DVDs) were on the shelves “library-style,” meaning they were on the shelves with their spines out, like you would put them on your own shelves–and it was still packed. You could find anything you wanted there.

    We decided one night to try Blockbuster. We walked in and the first thing we noticed was that the movies were facing out, with the covers showing. They were about 6 inches apart from each other and there was ABSOLUTELY NOTHING we wanted to see. We left without renting. We returned to other Blockbusters a few times after that, but it was always the same. Few movies and none that we wanted to rent.

    That they have existed until now is a miracle, I think. Good riddance. Long Live Netflix Watch Instantly!

    • freelunch says:

      It is a funny truth that customers value CHOICE above all… give them the choice of 1000 different movies (half of which are horrible), and they will be happier than a collection of 500 all time greatest movies… Fry’s Electronics has discovered this, and their movie sections are often epic in size.

      • TBGBoodler says:

        True! But what makes a movie great for me is probably very different than what makes one great for you. Nice to have twice the choice any time.

      • jesirose says:

        I think there is a small market for less choice. I never look at the movie selection at Fry’s, because it’s overwhelming. If you’re not looking for something in specific, sometimes you just want to see a 10% selection of popular and new movies. That’s what I think of for Blockbuster.

        But then I switched to Redbox. Redbox has probably less movies in it than a Blockbuster store did, but all I use it for is brand new movies.

        Makes me wonder what Redbox does with the movies once they’re out of the machine, to make room for new ones. They must sell them somewhere…

        • Destron says:

          The red box machines around where I live sell older movies, you can buy them for $5 right out of the machine.

    • raydee wandered off on a tangent and got lost says:

      I used to work at a tiny mom ‘n pop video rental store, and yeah. I loved the huge selection we had in VHS. Then the manager decided that we needed to have everything facing out like blockbuster, and we started to sell off the things that rarely rented.

      We were probably the last store for an hour in any direction that still had VHS … and I always thought that if they were still actually renting–and they were!–that we should keep them. :(

  10. brianary says:

    Here, if you have a milkshake, and I have a milkshake, and I have a straw. There it is, that’s a straw, you see? You watching?. And my straw reaches acroooooooss the room, and starts to drink your milkshake…

    I… drink… your… milkshake!

  11. Larraque eats babies says:

    I have netflix. Netflix is awesome. Instant streaming on my xbox is amazing.

    I go to red box when I want a movie right now. It’s the same driving distance to a red box as to a blockbuster. It costs $1 to rent a movie as opposed to $2.79.

    I use gamefly when I want to rent video games. $7 for a single five night rental is way too expensive when I can rent 2 games at a time for $22 for a month. Not to mention that blockbuster is almost always out of whatever new release game I actually want to rent. Gamefly usually is too but at least they have a more complete selection.

    I go to blockbuster when I want to buy DVDs. They give me DVDs 4 for $20. That’s the only reason I stop into blockbuster anymore. There is nothing they can do to make me rent from them again, short of drastically lowering their prices and improving their selection

  12. MongoAngryMongoSmash says:

    Ok, you had the Ski Free Yeti in the last post, now all you need is the Price is Right Mountain Climber on the NetFlix line to complete my day. Complete with yoddeling.

  13. MonkeyMonk says:

    In my experience Blockbuster made it a business practice of alienating customers. Whether it was gouging people on late fees, restricting access to NC-17 films, predatory practices that helped shutter many local mom & pop stores, cutting “objectionable content out of films, horrible in-store customer service, etc., Blockbuster seemed to hold on because it was the best option left for people who wanted to get videos.

    The second a viable alternative came about (e.g., Netflix, Redbox) people immediately and happily jumped ship. I joined Netflix 6-7 years ago and have never stepped foot in a Blockbuster since.

    I had a similar experience with Comcast recently. I had used them for years and even though it was a completely horrible experience I didn’t have any other good options. I moved to an area with FiOS and immediately left cable and (I hope) I never need to return. I hope that will be saying the same thing about Comcast in the near future that we’re saying about Blockbuster now.

  14. AllanG54 says:

    Heard a great report on CBS radio this morning that said the problem with Blockbuster was that the executives there thought like 56 year old men, only worried about preserving their pensions and not trying to expand with mail order and the like because they didn’t think that it would be such a big thing. Also, many people said they were hit will BB’s huge late fees when renting and they didn’t care if they were gone.

    • zekebullseye says:

      The late fees were the reason I left. They were ridiculous.

    • quail says:

      Don’t forget this was also the company that tried to strong arm Florida and Kissimee when they were headquartered there to give them a sweetheart deal to build a theme park like Disney’s. After years of unsuccessful attempts (but we’re a billion dollar company!!) they threw a hissy fit and moved their HQ to Dallas, TX.

      That in itself spoke volumes about where their interests were. Self-absorbed jerks…

    • webweazel says:

      “many people said they were hit will BB’s huge late fees when renting”
      I seem to recall reading a story about an experiment that some people did. I think I read it here, actually. It was where people would go into BB, rent a movie, go outside and sit in their car for a few minutes, then go back into the store and put it in the return slot. They were charged late fees quite often.
      This is the bullshit they pulled that put a bad taste in people’s mouths that got them a few $$$ short-term, but lost them customers in the permanently long term. Which is a basic spiral into eventual bankruptcy anyway.

  15. Billy says:

    I assume the vertical axis is stock price? It’s not labeled.

    • freelunch says:

      check out the right side of the chart… the vertical axis is percent (%) change in stock value.

      • Billy says:

        It’s a percent. I’m assuming it’s a change in stock value, but it’s not labeled. It could be a change in percent of customers for all I know.

        • ablestmage says:

          The “whatever” line in the description should have been a tip-off about Consumerist’s general depth of research… and now, graph-making.

  16. Remmy75 says:

    Blockbuster is like the Recording Industry refusing to embrace the internet and what it could do for thier business.

    If we refuse to change everybody will stick with us cause we are the only game in town. WRONG!

  17. CBenji says:

    I too have Netflix & their streaming on the Blu Ray is wonderful. First I used them on the Wii, but with the Blu Ray it is so wonderful, WOW! As I posted previously I am just now dumping Blockbuster, but the store near my house is still going gangbusters. If you go by there on a Friday or Thursday night they are busy as can be. Most people in my area are older I think & don’t do streaming. I myself am a bit lazy just to go to the video store, but I will say I did like the fact that Blockbuster at least improved enough to show whether they had a video in their store in their online through the mail thing. Yet the only thing the were good for really was new releases and Netflix is king on price. Redbox is in my area, but they are only doing the drop thing no streaming.

    Now I worry once Blockbuster is done because Netflix will have the monopoly. I hope Blockbuster resurfaces as a leaner meaner company that is able to improve because otherwise we are all in trouble, seriously.

  18. katras22 says:

    The customer service at my Blockbuster was never bad, it was actually really good and that’s why I held out on Netflix. However, I couldn’t pay $5 for new movies and old movies. Was it $5 per movie whether new or old at any other person’s chain? Another problem was the fact that the store was horribly outdated and small and simply couldn’t carry good old movies because they had no room to update to the DVD format and they threw the VHS tapes away. I had to go to another store and get the VHS to see older movies (sad, I know) My recent joining of Netflix has been AWESOME!

    • CBenji says:

      For me I did that total access thing, so I would turn in my mailed DVD’s every time I got a DVD at the store. Then you could keep the DVD you got from the store however long you liked too, & most of the time I didn’t keep it very long. Then they would mail you a new DVD the next day, well as long as you had something in your queue that wasn’t too far down the list on long wait. My problem was finding something that wouldn’t show up on long wait in the mail queue. So I went back to Netflix, and they are 100 times better than they were 3 years ago. Their streaming is so good, and they are so much faster with their mail DVD’s too. I wonder how they improved that, as it would take 2 days in the mail before. Very interesting.

      • katras22 says:

        I did the total access thing as well and liked being able to go the store and exchange, but then they limited the exchanges to, I think, 5 per month whereas before they were unlimited. I was frustrated by that. Were yours limited as well? And you’re right about the long wait, apparently Blockbuster had a VERY limited stock of movies and the wait could be months, disappointing if you really wanted to see something that your store didn’t have.
        That is interesting that Netflix got better, but I can’t compare since I’ve only recently gotten it. I guess they opened more distribution centers? or had a larger stock of movies? I just know that a distribution center is only about an hour and a half away from where I live so I get movies extremely fast in the mail.

  19. firestorm888 says:

    Hey Megan – Fist time caller, love the show.

    Stat nerd in me wants to know – This clearly a cool logarithmic graph of NETFLIX’s and BB’s percent ______ vs. time that shows how both the the beloved and hated franchises yadda, yadda, yadda.

    Please fill in the blank. Percent ‘RADITUDE’ vs. time, perhaps? :wry grins:

  20. evnmorlo says:

    There can be only one…

  21. firestorm888 says:

    Hey Megan – Fist time caller, love the show.

    Stat nerd in me wants to know – This clearly a cool logarithmic graph of NETFLIX’s and BB’s percent ______ vs. time that shows how both the the beloved and hated franchises yadda, yadda, yadda.

    Please fill in the blank. Percent ‘RADITUDE’ vs. time, perhaps? :wry grins:

  22. kursk says:

    Blockbuster did/does stand a chance having storefronts just as much as Scottrade does. In an industry where 93%+ of the business is done online, they are making a mint. But, that requires the upper management of a caliber that Blockbuster doesn’t have.

  23. trey says:

    i think it is wonderful… Blockbuster always thought their $hit didn’t stink and they were the only game in town. whats that? is that the sound of the door hitting you in the ass on the way out?

  24. Daggertrout says:

    Wow that’s a shitty graph. Not only is the Y axis completely unlabled, the units are horribly skewed, the gap between 0 and 1000 is nearly four times as big as the one between 1000 and 2000. And it doesn’t even indicated if the same scale is used for the negative side.

    Better luck next time.

    • joshua70448 says:

      I take it you’ve never seen a logarithmic graph before? That’s what the Y scale is supposed to look like. But yes, I agree, it needs better labeling.

  25. HighontheHill says:

    I used to do a great deal of business with BB back in the. One day I returned a movie, someone put it on the shelf where it sat un-scanned for a month, the next time it was rented this triggered it’s return and I was billed an insanely large amount. I discussed this with the manager who clearly didn’t believe my story but reluctantly credited me. Fast forward several months when this happens again, this time the movie sat on the shelf for a couple of months and the late fees were in excess of $100, I went in to the manager (different one now) who found a note on my account indicating that my account was never again to be credited for late charges; and the fight was on. I canceled my account, closed the credit card linked to the account and told them to eat shit and die.

    At some point they gave up, never dinged my credit, and I wait with baited breath for the day they finally realize their business model is extinct and they finally die….

  26. Gladeye says:


  27. donovanr says:

    The fake “Hello” when you entered was my main gripe.
    Next in line would be the non-stop overcharging for everything.
    Blockbuster didn’t realize that the moment that people had a better option they would abandon BB in a second.Also through their abuse they created the opportunity for a serious competitor. They somehow must have deceived themselves into thinking that their customers were stupid (read loyal).

    But you can’t entirely blame BB. They were just a stooge of the movie industry. How long before Netflix will be twisted into a customer hating monster by the movie industry?

    • quail says:

      It’s sad, but I too see a day when movie studios will strong arm the Netflix guys that are out there into upping their prices. They did it with movie theatres.

  28. jefeloco says:

    Thanks, Meg, for saying so much with so little.

  29. the_Jenkins says:

    I didn’t know BB had the chance to by NF. Well, atleast it wasn’t as huge a blunder as Coke passing on buying Pepsi!

  30. phobos512 says:

    I’m going to go with Stock Price over time based on looking at NFLX’s index value over on Yhaoo Finance. And you can blame Consumerist all you want but there’s a (C) Yahoo in the bottom left corner of that image indicating that they aren’t solely responsible for the graph’s suckitude. And yeah, logarithms people. Displaying vastly varying data in a small space. Welcome to the future.

  31. jim says:

    movie theater prices for concessions without the theater experience, essentially a company that became obsolete in many ways. I stopped going there years ago.

  32. keepntabs says:

    I have Netflix, and enjoy the online streaming, but still want to retain the option of receiving physical media. Although it doesn’t happen frequently, there are times that my Internet service goes down, and usually when I want watch something (I don’t have cable/satellite, I watch almost all of my TV programs online). When this does happen, I can at least watch Blu-rays, DVDs and OTA television until the service is restored.

  33. 24gotham says:

    I’d shed a tear, but I am too busy trying to think of the last time I even saw a Blockbuster, let alone gave them any money.

  34. YouDidWhatNow? says:

    I make my own movies at home.

  35. radon says:

    When Blockbuster tried to do mail rental too, while Netflix only did mail rental, I imagine that was a huge cost for starting up in the new area. Netflix only had to worry about that one area and focus on it obsessively, to succeed.

    Knowing I could find an endless selection of movies at Netflix, from the latest Hollywood blockbuster to an obscure exploitation film to anything foreign, the ability to rent TV-on-DVD and keep those as long as I need without having late fees, knowing any extreme or horror or adult movies I watch are not going to be edited, plus affordability and pricing tiers, and there’s no reason to use Blockbuster.

    Granted there are many ways Blockbuster could survive–wider selection, minimize late fees, rental duration and fee tiers (the nearby independent movie rental shop does all of these things and is still going and often busy). However, now that it’s so easy to watch movies and TV online though, Blockbuster might fall even more behind the times and never catch up. They would have to absolutely and completely change their business model and mindset.

  36. HeyApples says:

    In terms of shady business practices and arrogant management, they are very much akin to Circuit City. Goodbye.

  37. dblevins says:

    How about a new graphic with the vertical axis label to what it is???? Could be the change in the number of email messages to the National Weather Service by employees of !!!

  38. Mogbert says:

    For me, the biggest fail of Blockbuster, and the sign that things were over for it (actually, the last time I ever rented anything from them) was the singing and dancing “No more late fees!” comercials. I took that as a slap in the face because they were just calling late fees “restocking fees” and making you BUY the DVD if it was late. In other words they made their policy worse, and instead of explaning it in a smal Times New Roman sign by the register, they mislead people and put on a song and dance routine… litteraly.
    I have been more then happy with Netflix, and their online streaming just keeps getting better and better! Anime FTW!

    • dvdchris says:

      Wow, excuse them for reducing the $45 of daily late fees you would have been charged for 15 days before the rental wrote off as non-returned to NO LATE FEES and a $1.25 restocking fee to cover the collection cost to the store of $1.24.
      Members were always and will always be charged for the non-return of product. You cannot just go in and never return a rental and not expect to be charged for it. BLOCKBUSTER HAS ALWAYS CHARGED FOR THE NON-RETURN OF THEIR RENTAL ITEM just as EVERY OTHER BUSINESS THAT RENTS ITEMS TO CUSTOMERS. Is it really that hard to understand?
      Under the ‘no late fees’ campaign, unreturned rental costs were reduced to the market value of the item, taking into consideration the age of the rental and whether or not it was available for sale as previously viewed. In return, to make themselves look ‘pro-consumer’ instead of the assholes they are, attorneys general of multiple states decided to sue over the $1.25 restocking fee. Wow. Big win for consumers. And we are all safe now from prostitution following their attack on craigslist as well.

  39. dvdchris says:

    “Yes, this is a gross oversimplification, but you know… whatever.”
    I think you’re a gross oversimplification, Meg, but… whatever.

  40. Endgame says:

    Never Liked Blockbuster anyways,

  41. ablestmage says:

    I am entirely, entirely convinced Blockbuster could go back to the black if they lead the industry in game rentals. The average cost from several major renting stores in my city have video game rentals at EIGHT DOLLARS per week. Video games used to rent for $3 or so back in the Nintendo and Super Nintendo days, and their original retail purchase price at the time IS THE SAME it is now. I would be renting a metric pants-load of games, more often, if the rental prices for video games was down from the hideously unreasonable rate of $8/week.

  42. Blious says:

    I tried Blockbuster’s online choices but it was an absolute disaster with few choices, clunky service, and just a experience that made everyone I know want to never come back

    Netflix is easy, has great service, and has a solid selection