10 Things You Didn’t Know About Blockbuster Video

[00:00:00][music] >> It was a Friday night and the weekend had just begun. So you can finally leave the annoyance of homework and school teachers behind you for two days. And there was no better way to start your weekend than a trip to the local video store [music] where you and your family would take a trip to the video store and pick a movie to watch. It was a joyful magical experience and actually going to the video store was part of the enjoyability of watching a movie. And when it came to video stores none were more epic than Blockbuster Video. It was huge, it was blue and yellow, and it was [music] an epic video store unlike any other. And sadly, it's something that no longer exists. But that hasn't stopped me from recreating my own Blockbuster Video store in an attempt to keep the video store experience alive as video stores will always have a place in my heart. And just like many people of my age, visiting a video store and getting caught up with its exciting [music] atmosphere was a huge part of our childhoods. And if there was one video store that was truly epic and bigger and better than all the others, it was Blockbuster.

[00:01:13]So how did Blockbuster Video come to be?

[00:01:16]Who invented it and why? And what really led to its downfall? Well, today we are going to try and find out as we look into 10 things that you didn't know about Blockbuster Video. Where throughout the video I'll insert clips of my own homemade Blockbuster Video.

[00:01:32]You know, just for good measure and maybe to flex a little bit I guess and you know, bragging rights. Anyway, let's check it out.

[00:01:42]>> [music] [music] >> Bringing you the entertainment revolution.

[00:02:20]>> Blockbuster [music] Video, wow, what a difference.

[00:02:25]>> Number 10, from Oiltech to video cassette.

[00:02:32]Well, our journey into the life and times of Blockbuster Video starts in Dallas, Texas [music] in 1978, where a businessman called David Cook had started up his own business, which was to sell computer software programs to oil and gas industries. So, it seemed that it was all smooth sailing into that good old expensive Texas tea, yeehaw.

[00:02:54]However, by 1985, there was a crash in the oil market, of which Cook's company was really suffering.

[00:03:02]However, thankfully, he had his wife, Sandy Cook, to the rescue, as she had come up with the idea of them going into the video rental business. At the time, video rentals were a relatively new but booming industry. According to Mental Floss, the video store market had grown from 7,000 stores in 1983 to 19,000 stores in 1986, with the home rental market proving to be a lucrative business. So, [music] the Cooks sold off a subsidiary of their Oiltech business and bought into a video store franchise in Dallas.

[00:03:38]However, it wasn't quite Blockbuster yet.

[00:03:42]Number nine, the dream started off with a different video store franchise.

[00:03:50]The video store firm that the Cooks had brought into was one called Video Works.

[00:03:55]Yep, before Blockbuster, there was Video Works, where they owned and was running one of their stores. However, the Cooks had big visions for their video store.

[00:04:03]They wanted to add flair and flavor, and to make visiting their video store to be a unique experience. It is said that it was Sandy Cook who came up with the idea of giving the store a blue and yellow color layout, aka the iconic Blockbuster Video colors. So, the Cooks had started planning to redecorate their Video Works store, giving it that blue and yellow look. That is until the higher-ups at Video Works said, "Oh, no, you don't.

[00:04:30][music] Stop right there, buddy." And so, the Cooks were denied permission to redecorate the Video Works store with their new ambitious color scheme. So, the Cooks discontinued their connection to Video Works, where they invented their own video store company called Blockbuster Video, which could use the couple's desired blue and yellow color schemes. David Cook sold off the rest of his Oiltech programming company to fully invest in Blockbuster Video, so he could now branch out his new company. The first ever Blockbuster Video opened up on October the 19th, 1985.

[00:05:07]So, really, Blockbuster came to be because the Cooks wanted a blue and yellow color scheme.

[00:05:16]And so, because of that, a legend was born.

[00:05:20]Number eight, reaching huge heights of success.

[00:05:24]>> [music] >> The first Blockbuster Video store had up to 8,000 video tapes [music] and 2,000 Betamax tapes. However, at that time, video stores would have empty video boxes on the shelves with the tapes in a back room in order to prevent theft.

[00:05:41][music] But, the Cooks just didn't have the practical space to have all these tapes floating around the place. So, Blockbuster was the first video store chain to keep video cassette tapes in the covers, which was stacked on the video store shelves. But, this actually proved vastly successful, as this meant that they could have super quick dealings with their customers, and that they could fill their video stores with product within a day, which actually really helped with the company's growth.

[00:06:07]And by 1988, there was over 400 Blockbuster video stores. Yes, indeed, this was a company that was thriving.

[00:06:17]David Cook even opened up a warehouse full of stock, which allowed for Blockbuster video stores to be opened up very quickly. Blockbusters also, unlike other video stores, didn't have an adults-only section in order to keep a family-friendly image. This made Blockbuster very marketable, and the company caught the attention of Wayne Huizenga, who was the co-founder of Waste Management, who, along with his associate John Melk, had bought into Blockbuster video and used the same model of expansion by Ray Kroc, who had previously bought McDonald's. Yes, as in that guy the movie The Founder is based on. Which, thanks to this, Blockbuster had become such a huge and successful business, it got to the stage where a new Blockbuster video was opening up every 24 hours. And to keep up with the fashion of being a family-friendly company, Blockbuster even got mascots in the form of the Blockbuster Kids, a cool group of animated kids who love nothing better than to go and hang out at Blockbuster video. The question is, are you cool enough to hang out with the Blockbuster Kids? Yeah.

[00:07:24]>> [music] >> Number seven. Wow, what a difference.

[00:07:32]So, it's here we get to Blockbuster's iconic catchphrase, "Wow, what a difference."

[00:07:37]>> [music] >> What a difference.

[00:07:42]So, where did this marketing tagline come from and what does it mean? Well, according to the ranker.com, it goes back to Wayne Huizenga, who as mentioned, ventured into the Blockbuster business. But he originally saw video stores as being seedy little stores in rough neighborhoods. But upon venturing into a Blockbuster video store, he changed his mind on the account that Blockbuster was a large family chain.

[00:08:07]However, Huizenga still had a distrust and lack of respect [music] for video store businesses. So, he came up with the slogan, "Wow, what a difference."

[00:08:16]Meaning what a difference between Blockbuster, a professional video chain, and the smaller rental companies, which in his eyes were seedy companies that dabbled in adult entertainment, unsuitable for families. Now, I never knew this before, but apparently there is something of a stigma that Blockbuster wasn't very friendly or fair to small video store companies. In fact, when I announced on the Facebook page that I was going to make a video about Blockbuster, there were a few comments about the company's reputation for how it treated smaller companies. Now, look, I don't know if this is true or not, and as much as I would love everything to be wine and roses, I do feel that sometimes I've got to talk about the not very nice stories involved with the subjects that I am talking about. So, yeah, I don't know if it's true or not, but these stories are apparently out there.

[00:09:06]But once again, I don't know if this is fact, just a few comments and whispers I've heard here and there. So, take with that what you will.

[00:09:14]Number six, Nintendo was not a fan of Blockbuster.

[00:09:18]>> [music] >> Blockbuster wanted to expand from renting out movies to also renting out video games. As in the late '80s and early '90s, video games had become a huge enterprise when it came to child-friendly home entertainment. In fact, most people's memories of Blockbuster was renting out classic video games, as it was a huge part of the video store experience. However, Nintendo originally were not happy with this. So, they filed a lawsuit against Blockbuster and supposedly even lobbied their concerns at the US Congress.

[00:09:52]Despite their efforts, Nintendo were unsuccessful with their lawsuit.

[00:09:56]However, in the following years, Nintendo were fully behind Blockbuster renting out their games. I I guess they really didn't have a choice. Blockbuster didn't just have its sights set on Nintendo, either. The company would buy other video store chains as well as even buying out several music retail chains where they created Blockbuster Music.

[00:10:17]Oh, and it gets weirder. Blockbuster even bought interests in Spelling Entertainment Group as in that company founded by Aaron Spelling, of which at that time was producing popular TV shows like Beverly Hills, 90210, and Melrose Place. That's probably why at this time there was Blockbuster commercials featuring several cast members from Melrose Place. Yes, indeed, Blockbuster Video was at the height of its powers and was a multi-billion dollar juggernaut.

[00:10:48]However, as with most things in life, sometimes when you reach the top, there's only one more direction you can go to from there.

[00:10:56]Down. Number five, the case of the bizarre Blockbuster Video Theme Park.

[00:11:04]In the early '90s, there were fears starting to generate that Blockbuster may start to suffer losses due to new technologies that may replace video stores such as cable TV, which was increasing at the time, and video on demand. According to Wikipedia, Blockbuster Video's shares had dropped more than 10% when Time Warner announced that it would be making upgrades to its cable TV station. Wayne Huizenga, who as mentioned had become a huge driving force behind Blockbuster Video success had become its chairman and was thinking of ideas for Blockbuster to stay relevant in this new ever-changing industry. So, he did conceive the idea of buying a cable company, which would have put Blockbuster Video in the cable TV arena, but this idea was scrapped.

[00:11:49]His next idea was to make a Blockbuster Video theme park. It was to be a 2,500 acre park in Florida, which then became the Blockbuster Party, which was to be an amusement park with laser tag and other rides and games and restaurants.

[00:12:04]The park was being pitched at two locations, one being New Mexico and the other being in Indiana, and it was described as a miniature Disneyland on steroids. However, the concepts had proved [music] to be unsuccessful and nothing came of the ideas. And in a weird twist of events, Huizenga ended up selling Blockbuster to Viacom, who wanted the company at the time in order to generate funds for their quest to buy Paramount. Uh, such is the way of things when it comes to the business industry.

[00:12:36]Seriously, now there was nearly a Blockbuster theme park?

[00:12:42]Regardless, things are getting really weird. It's okay. It's all good. I'm just going to take a breather and go and talk to my local news about my homemade Blockbuster Video while looking 10 times bigger than what I actually am.

[00:12:57]So, let's go do that.

[00:12:59]>> It's been 7 years since the last Blockbuster outlet closed its doors in Australia, but the brand lives on in the garage of a Mornington Peninsula home, bringing back memories of the good old days.

[00:13:09]>> The sights and sounds of yesteryear.

[00:13:13]You'd be forgiven for thinking we've stepped back in time.

[00:13:15]>> One of the most magical things ever was going into a video store.

[00:13:19]>> Not just any video store, a mini Blockbuster. From DVDs to VHS tapes, cinema history on display in his garage.

[00:13:26]>> The room is decked out with arcade and pinball machines. Blockbuster in Perth closed 7 years ago.

[00:13:32]>> I think it's sad that they're no longer with us. I wanted to recreate it and I wanted to keep it alive.

[00:13:37]>> So, do you plan on opening this up to the public?

[00:13:39]>> I wouldn't open it up to the public, but it is here for the whole world to see.

[00:13:43]>> For many, renting out a film was once a cherished Friday night ritual with >> Okay, guys. Well, I'm going to go back to making my video, if that's okay.

[00:13:50]>> country, but with the dominance of streaming, these shelves >> All right. Well, I guess I'll leave you to it.

[00:13:56]>> Blockbuster in Perth closed 7 years ago.

[00:14:00]>> Anyway, >> Number four, a missed opportunity.

[00:14:06]So, as the '90s became the 2000s and VHS became DVDs, Blockbuster Video was still leading the way in the home rental market. However, there was one fatal element waiting in the shadows, waiting to strike, waiting to knock Blockbuster off its mantle. And that was, of course, Netflix, which was created in 1997 and was originally a mailing DVD company.

[00:14:31]Netflix actually reached out to Blockbuster for the store giant to buy their company for $50 million, but Blockbuster turned the offer down.

[00:14:40]And this would go on to be a fatal error, as this deal would have actually saved Blockbuster's bacon in the long run. But, I guess at that time, Blockbuster didn't need Netflix. They were a corporate giant and Netflix was a new company, the underdog. But, it was a company that was continuing to grow. And by 2006, Netflix had 6 million subscribers. Suddenly, Netflix was no longer a small, insignificant company that paled in Blockbuster's shadow, but they were becoming an overpowering rival in the field of home entertainment. It is said that Blockbuster didn't really think the idea of mailing order DVDs would work, and so that's why they were hesitant. Blockbuster did eventually offer an online service, which was seeing a healthy growth, but Blockbuster's CEO at that time, John Antioco, was forced out of the company with new CEO James Keyes taking over.

[00:15:35]Where according to information offered by Wikipedia, he increased the prices of online rentals and scrapped a free movie deal, of which this caused Blockbuster's online rental scheme to suffer. And Blockbuster would enter the mail order business, but it couldn't compete with its competition. Meanwhile, Netflix was still riding high and building from strength to strength. And, well, look at what it's become. I wonder what would have happened had Blockbuster bought Netflix. Now, there's been something of a story floating around out there that Netflix's co-founder Reed Hastings created Netflix because he rented out the movie Apollo 13 from his local Blockbuster, to which he accumulated $40 in late fees when he returned it a few days late. But, it has since come out that this story was invented as a marketing story, you know, to create some lore for Netflix. Cheeky buggers.

[00:16:31]However, those darn tootin' late fees would most definitely become a point of contention when it comes to Blockbuster Video. Oh, boy, buckle up for this one.

[00:16:42]>> [music] >> Number three, late fees controversy.

[00:16:48]>> [music] >> And of course, we can't ignore something that was a huge earner for Blockbuster Video, and that was its late fees. Where members would get charged for each day they don't return their videos from the day that they were due back onwards. In the year 2000, it is said that Blockbuster made up to $800 million in late fees, aka 16% of the company's profit. Wow, that's a lot of late fees.

[00:17:15]I guess some people rented out Tango & Cash and Weekend at Bernie's 2 longer than they should have done. Once again, going back to that post I put up about making this episode, I got two interesting comments. One from a Blockbuster employee and the other from a customer, both of whom had something to say about the late fee policy. They are honestly both really interesting reads as you get a glimpse from both worker and customer as to how flawed the late system was and how it could be unfair to both the workers and the customers. Yeah, this was not a perfect system. However, the late fees would lead to several legal issues, such as a lawsuit in 2002 where Blockbuster would have to pay $450 million in late fees refunds as they had special buy one get one free coupons, which would have required the customer to make an initial expenditure. Look, I don't really understand the legalities of this issue, but yeah, going by that, for some legal reasons, those particular late fees were null and void. Blockbuster also had to pay over $9 million on attorney fees in that case.

[00:18:26]Then more problems continued in 2005 when it was announced that Blockbuster was scrapping all late fees on rentals, but this wasn't entirely true as customers were being charged full purchase price for keeping rentals 30 days and longer after their return dates, >> [music] >> which caused legal investigations on the grounds of false advertising. And this led to Blockbuster having to reimburse the customers and pay for the investigations.

[00:18:53]What a weird world we live in where customers who have rented movies and have had said movies 30 days overdue were getting legally rewarded. Well, I guess that's because they advertised as the late fees being scrapped [music] and advertising late fees being scrapped unless you keep the movies for 30 days over just didn't have the same ring to it. Blockbuster did eventually entirely scrap their late fees later down the track, but it supposedly made the company lose a lot of money. But, it did reintroduce it in 2010. But, at that stage, Blockbuster was locked into its downward spiral.

[00:19:28]Number two, Blockbuster Video and Australia was a match made in heaven.

[00:19:36]Something I've noticed a lot of American viewers say when I talk about Blockbuster Video is, "What? You guys had a Blockbuster Video store in Australia? Really?" Well, yeah, we did.

[00:19:48]In fact, Blockbuster Video was huge here in Australia. In fact, I'm pretty sure that at one stage we had about five in my local area.

[00:19:57]Blockbuster Video, of course, expanded from American shores and [music] would brand itself in 14 other countries, including the United Kingdom, Brazil, Japan, and Norway. And of course, one of these countries being Australia.

[00:20:11]>> Blockbuster Video have more copies of the hottest [music] new releases than ever before.

[00:20:16]>> Blockbuster Video first reached Australian shores in 1991, and I can remember stepping into my very first Blockbuster Video. It was huge. This wasn't some little video store, but a big kingdom of videos. It also had a massive play center for the kids, a room to play free video games, [music] and rows and rows of candy. Oh, and not to mention, of course, so much blue and yellow. To me, as an 8-year-old, this was like stepping into magic land, like the ultimate fun dimension of awesome.

[00:20:48]By the late '90s and early 2000s, Blockbuster was the leading video rental retailer in Australia and had brought out several Australian video store companies. [music] For example, in my hometown, there was a Civic Video, which got rebranded as a Blockbuster.

[00:21:04]However, here in Australia, we didn't know about the difficulties that were brewing between Blockbuster and Netflix.

[00:21:11]We didn't even know that Netflix existed. And because of this, an Australian-owned retailer called Video Ezy was increasingly taking over. I think back in the day, Video Ezy adverts had this slogan that went along the lines of get it first time or get it free.

[00:21:29]>> [music] >> And in the schoolyard, me and my friends would change it to get it first time or pee on me or something like that.

[00:21:39]In 2007, Video Ezy had completely taken over Blockbuster Video with Blockbuster selling its Australian store network to Video Ezy. So now, Video Ezy was the dominant force of video rentals in Australia. However, the victory was short-lived as Video Ezy couldn't survive the video store apocalypse and would become defunct. But despite all this, Blockbuster was such a big deal in Australia, it had one of two Blockbuster Videos left after the company had completely shut down globally. And it was located in Western Australia. And sadly, it was shut down in 2019.

[00:22:16]>> [music] >> Number one, this is the end.

[00:22:22]So what was the exact reason for Blockbuster's downfall? Well, there is a variety of explanations. The biggest culprit which gets the blame is of course Netflix, whom evolved into an online streaming service. There are other factors given to the company's failing like bad management and bankruptcy. [music] But in reality, the world around Blockbuster was changing. I think it sadly was a matter of time until the company, as well as other video stores, would become no more thanks to the decline of physical media and an increase in streaming where most movies and TV shows are now ready at people's fingertips, accessible in the comforts of their own homes where they don't have to just watch them on TVs, but on other devices like iPhones and iPads. On a practical level, this makes taking a trip to a video store null and void. But on an emotional level, something sacred and magical to many people's childhoods is now missing.

[00:23:19]Blockbuster Video would file for bankruptcy, with the company being over $1 billion in debt.

[00:23:27]And sadly, from there, the company's fate was sealed, along with all other video stores. It wasn't a question of if, but when the inevitable would happen.

[00:23:38]Where over the following years, many stores were bought out or closed down.

[00:23:42]And in 2014, the remaining company-owned stores had closed down, with only two franchise stores left. One being in Western Australia, which closed down in 2019 as mentioned, and the very last one in Bend, Oregon, which thankfully is still around today, making it the last Blockbuster.

[00:24:01]In a twist of fate, the very last movie that was hired from the last company-owned store was the comedy movie This Is the End. The irony being, this was indeed the end. In hindsight, no words could express how magical it was to go to a video store on a Friday night and see all the video covers on display, all the colors and energy. It was truly a magical experience, which is lost to those who don't know what that was like, those who now have unlimited access thanks to streaming services.

[00:24:33]The days of the video store were simpler times, but it just added something more wonderful to the experience of watching movies. Yes, economically, it makes sense that video stores are no longer around, as there isn't really much point in them [music] thanks to streaming and the lack of physical media. But because of our love of making things simpler and more efficient, we've lost something truly beautiful and brilliant.

[00:25:05]I hope you have all enjoyed my loving journey into the past as we've all explored the history of Blockbuster Video. Please comment below your favorite video store memory as it seems that most people of my generation do have video store memories. But, video stores actually do still continue now through the hearts and the minds and the memories of those who loved them when they did exist. As long as we hold on to those memories and experiences and share them and pass them on, then you will never get rid of video stores. That's why it's important for people like us of this generation to keep the magic alive by keeping the memories and the experiences going. Anyway, I'm Minty and wow, what a difference. See ya.

[00:25:51]>> [music] >> Go.

[00:26:00]>> [music] >> Go.

[00:26:04]>> [music] [music] >> Go.

[00:26:15]>> [music] >> Go.