Netflix, 2000

Did Blockbuster really turn down buying Netflix?

The short answer

Yes. In 2000 Netflix offered to sell itself to Blockbuster for $50 million and was turned down. Netflix kept building and became worth over $150 billion, while Blockbuster went from 9,000 stores to one.

The situation

Your DVD-by-mail business is losing money. You offer to sell it to the biggest video rental chain in the country for $50 million. They laugh you out of the room.

The options on the table

  • Drop the price and try again
  • Keep building and compete with themWhat they did
  • Find another buyer
  • Merge with a smaller rival

What happened

Blockbuster turned Netflix down. Netflix kept building and is now worth over $150 billion. Blockbuster went from 9,000 stores to one.

Sources: Fortune

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