October 10, 2005
Blockbuster Could Have Bought Netflix for $50 Million
In an article in Variety, a former Blockbuster executive talks about how they could of bought out Netflix for only $50 million a number of times. Today Netflix is worth over $1.4 billion and Blockbuster is swimming in red ink. In hindsight, it looks like a huge mistake not to buy the company.However it's entirely likely Blockbuster would of just ran Netflix into the ground after an acquisition and another internet startup would of taken its place. Blockbuster back then wasn't wild about cannibalizing their immensely profitable land-based video rental business.
“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.
