Red Vs. Blue: How Netflix Ended Corporate Tyranny

Art by Plaidklaus

Blockbuster Video – When I was a kid I spent countless hours within the halls of Blockbuster Video. Back then there was something magical about wandering up and down those isles looking at all the crazy movie boxes and wondering what mysteries were contained within. To clarify, this was before “the internet“, before IMDB, and before Rotten Tomatoes. As a customer you were really flying blind with only word of mouth to guide you. It was a strange and mysterious time, a movie roulette of sorts.  Back then a movie rental was still two or three dollars, and the cost of one of those rental VHS cassettes was $80.00 or more. Blockbuster became great at lying and taking money from it’s customers.  Just check out this testimony from a former employee.   During the golden age of Blockbuster’s rule, if your rental video was scanned into the computer ONE minute late, you were charged for an extra 48 hours of rental time.  From a business perspective it was genius.  Blockbuster was making wads of cash for doing nothing.  The rental video was in their possession, yet they were still charging the customer for the rental.  It was a model that we all accepted because that’s just how it worked!  Sure, we all questioned the logic, but we did nothing to challenge it.  My family of course, learned about Blockbuster the hard way.

The only photo of Ratboy on the web

Rat Boy – Being a total pain in the ass with a hunger for weird movies, I demanded that my family rent a little film called “Rat Boy” (because the back of the box had a the picture of a boy who was also sadly… a rat).  My parents gave in and we took Rat-boy home with us after paying Blockbuster three dollars for the 48 hour rental.  Rat-boy was not the film that I hoped it was, and ended up being a drama about “being different“… not lycanthropy.  After about 48 hours it was time for Rat-boy to go back to Blockbuster.   Not wanting to pay the extra 3 bucks, my father raced to Blockbuster on his motorcycle in an attempt to beat the clock.  Somewhere along the way the unthinkable happened!  The VHS copy of Ratboy flew off my dad’s Harley and exploded on the highway.

This will only hurt for a second – Blockbuster informed us that Ratboy would cost about $80.00 to replace, plus a “re-shelving” fee of a few dollars.  Really?  For a VHS cassette?  And on top of the $80.00 we would still have to pay the late fee because by the time my dad scooped up the exploded copy of Ratboy off the highway and returned it, time had run out.  So what happened next? It was pretty simple, we ran away and didn’t go back to Blockbuster for a long time.  Our story is NOT unique, Blockbuster made just as much money on late fees as it did on rentals.  In 2005 when they introduced  their “The End of Late Fees” campaign, but it was too little, way too late.  The damage had been done, and the average Blockbuster customer had already been abused in some fashion.

Blue meet Red – It turns out Netflix was created simply to destroy Blockbuster video.  In a story not unlike my own, Netflix founder Reed Hastings was charged a late fee for Apollo 13 after being only a few minutes late.  This pissed Reed off.  Rather than running away (like us) Hastings and his partner Marc Randolph decided to do something about it.  In a bold move they created Netflix, and built a rental model where the consumer could feel comfortable being lazy and watching films at his/her own pace.  We rent films to relax, not to beat the clock.  Hell, I’ve had a copy of Hellboy: The Golden Army for about six months and I feel not one ounce of guilt about it.  Netflix has single-handedly dismantled the evil empire that was Blockbuster video.  Sure, like any dying empire Blockbuster clings to the false hope of a Renaissance, but face it blue… we’re fucking done with you.  From an outsider’s perspective it at least appears that Netflix is based on convenience, consistency, technology, and above all else… honesty.   You don’t have to screw your customer to make a buck.

This Post Has 159 Comments

  1. Jesse

    First off, I remember watching Rat Boy as a kid. I can’t say I enjoyed watching it, but I definitely remember watching it. “Rat Boy’s brain hurts!!!”

    As for the rest of your article, I could speak at great lengths about the whole Netflix and Blockbuster battle. And despite everything, I really do love me some Netflix and have for many years. Yet, there has been plenty that has frustrated me about this company during my time as a customer. The not-so-little-anymore-but-rather-very-large-and-powerful-company has managed to maintain a likable image while doing some rather shady (clever? cunning? sly?) business practices ranging from throttling shipments/check-ins, uneven blu ray surcharges, removing of features from their streaming apps, and uneven price increases during periods of unexpected and increased earnings (yeah, I’ve read a few of Netflix’s quarterly reports over the years).

    I guess, it comes down to individual experiences and perceptions about a company. I had a Blockbuster account for many years and never had a problem with the company. I wasn’t a Blockbuster fanboy, but they never did anything that seemed to violated our agreement (rent movies at this price and bring them back by this time). Yet, I am so happy that Netflix exists and I am glad that Blockbuster’s dominant reign has been conquered, I just wish it wasn’t replaced by yet another dominating force. Netflix rules all now, including some 30% of the nation’s nightly bandwidth usage. That is a bit unsettling. Competition got Netlix to this point and years of unchallenged dominance found BB abandoned and alone.

    I just don’t see Netlix as good/honest and Blockbuster as bad/dishonest, but more so as Netflix seeing an opportunity to improve the movie rental business while Blockbuster (and any other movie rental store) were either unwilling or unable to offer a more valuable reason for sticking with them.

    ps – I’ve been a quiet observer of the site for little while now. Great stuff. Also, I went to HS with Matt & Scott. Hey guys! I live in Orlando now. Time to catch up!!!

  2. Micah G

    Elena and I encountered a problem about a month ago. I found out she had never seen the movie Snatch… and this bothered me. I have a Netflix account, but my desire to watch movies changes with the wind and I never have the foresight to have something mailed to me. So I decided, “well lets go hit big blue.” This is when I found out the hold-out blockbuster… the last of the three that were in town when I moved here had closed. I knew redbox wouldnt have it, but I still checked. I went home and fired up Netflix streaming, and because it wasn’t The Little Rascals or Porkies… netflix streaming didnt have it. Comcast on Demand… didnt have it. I just looked at Elena and I was said, “There is no way to watch Snatch without buying it or watching it on a computer…” So I said, fuck it, im going to buy it. I got to walmart and Best Buy and sure as shit they dont have it. The moral of the story is… Blockbuster for sure busted balls… but they had their place. Im not a “movie queue” kind of person and when I am in the mood for a movie… its like “now.” So now I just dont watch movies… my soul burns.

    1. Ash

      Ahh Yes, Micah and his hunt for “Snatch”… some things never change. I see what you’re getting at here, and I totally understand. On occasion you want an older movie ASAP, Netflix can’t really pull that off. Where Netflix streaming really does excel is in the documentary and television categories. Just last night I watched a crazy documentary about Libera. Blockbuster would never carry such a thing!

  3. Ash

    Jesse – What a great response. I can’t believe there is another human on this Earth that has seen Rat Boy, I’m in shock. I had to really play Devil’s advocate for the article to get my point across, but I did have a pretty positive relationship with Blockbuster for many years after I left home. I suppose it’s the lazy ass in me that enjoys being able to watch things at my own pace and not worry about getting a movie back on time.

    Also – Thanks so much for the kind words! They mean a lot. We work our butts off on the site and its always great to hear that people enjoy it. I’m sure Matt and Scott would love to catch up one of these days. Tacos!

  4. Jesse

    Netflix really is great.  The convenience and selection is unrivaled.  Also, for someone like me that really enjoys the obscure and the absurd and even the downright awful of the film world – Netflix instant streaming truly is a gift from heaven.  There is just the other part of me that feels the need to try and keep these big companies in check.  Regardless, I don’t know where I’d be without old red these days.  

  5. Micah G

    I noticed something unusual today… Elena asked me to check the DVR (shes been in Europe for 2 weeks)… and I turned on the TV and “E!” was on. It was at this point I realized in the two weeks of living alone I did not turn on the TV a single time. This pleased me.

    1. Ash

      That’s great! I think we will see a big shift in how T.V. and movies are viewed within the next few years. I haven’t watched a show that I didn’t PLAN on watching in ages, nor have I watched a commercial.

  6. Jackie

    Loving this article! I, too, had a love/hate relationship with BB… love the instant gratification, hate the guilt for dropping off the movies a month late and not returning to face the massive late fees. I do have to say though, there was something special about going to BB, fighting with my brother about the “movie night” choice, getting one of those absurdly big buckets of popcorn and returning triumphantly home with “Kindergarden Cop” (“It’s not a tumor”)…

    1. Ash

      Totally agree Jackie – There was something really fun about looking for the right movie at BB. Although I’ve started to do the same with my Netflix instant queue on my X-Box 360. It satisfies the same weird section of my brain.

  7. rose

    I think in the long run Blockbuster will be back in the lead over Netflix. I have always loved Blockbuster because I can get new releases 28 days before Netflix will release it. With my provider/employer DISH Network I can now get Blockbuster through them. I love it! Right now it’s really cool because Blockbuster has a deal for kids this summer. Customers can get unlimited kids and family movies on either DVD or Blu-ray for $4.99 a month (one movie out at a time) with the new Kids Summer Pass. Blockbuster will even throw in with each pass purchased a themed tote that kids can carry their movies in. Go to this website to check out the 3 months free promotion DISH is offering to new customers. I am so glad that Blockbuster restructured their prices and is now comparable to Netflix.

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