Ken Auletta: How Netflix Killed Blockbuster | Big Think
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- Опубліковано 30 вер 2024
- Ken Auletta: How Netflix Killed Blockbuster
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Ken Auletta on how Blockbuster underestimated Netflix.
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Ken Auletta:
Ken Auletta has written Annals of Communications columns and profiles for The New Yorker magazine since 1992. He is the author of eleven books, including five national bestsellers: Three Blind Mice: How the TV Networks Lost Their Way; Greed And Glory On Wall Street: The Fall of The House of Lehman; The Highwaymen: Warriors of the Information Super Highway; World War 3.0: Microsoft and Its Enemies; and Googled, The End of the World As We Know It, which was published in November of 2009. His other books include: Backstory: Inside the Business of News; Media Man: Ted Turner’s Improbable Empire; The Streets Were Paved with Gold; and The Underclass.
Auletta was among the first to popularize the so-called information superhighway with his February, 1993, profile of Barry Diller's search for something new. He has profiled the leading figures and companies of the Information Age, including Google, Bill Gates, Rupert Murdoch, AOL Time Warner, John Malone, Harvey Weinstein, and the New York Times; he has dissected media meteors that fell to earth like "push" technology and inter-active TV, probed media violence, the PAC giving of communication giants, the fat lecture fees earned by journalist/pundits, and explored what "synergy" may mean to journalism. His 2001 profile of Ted Turner won a National Magazine Award as the best profile of the year. He covered the Microsoft antitrust trial for the magazine. In ranking him as America's premier media critic, the Columbia Journalism Review concluded, "no other reporter has covered the new communications revolution as thoroughly as has Auletta." New York Magazine described him as the "media Boswell." In another life, Auletta taught and trained Peace Corps volunteers; served as Special Assistant to the U.S. Under Secretary of Commerce; worked in Senator Robert F. Kennedy's 1968 campaign for the Presidency; and was Executive Editor of the weekly Manhattan Tribune.
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TRANSCRIPT:
Ken Auletta: Netflix in the early days - we’re talking about the late 1990s - was terrified that it was gonna go out of business. They were mailing DVDs and it was very expensive to do that so they weren’t making any money. And Blockbuster was this colossus and so Reed Hastings, the founder of Netflix, gets on an airplane and goes to Dallas to try and convince Blockbuster to come together and partner in some way. Ultimately what he really wanted to do was for Blockbuster to buy Netflix and for Netflix to be their long range online arm because he knew one day he would be delivering television, or video over the Internet. And Blockbuster could have its stores but he thought the stores would be in decline as, in fact, happened.
Blockbuster in retrospect stupidly declined to invest in Netflix. And within a couple of years Netflix had basically helped destroy Blockbuster. Blockbuster was an old technology. You went to a video store to rent a video. Most of the top 20 movies were already out of stock because people had rented them so there’s a lot frustration. And Netflix was basically, you know, get what you want when you want it and knew that they would move away from the DVD business to the download video business. So you could watch as many, you know, you could never run out of stock.
I think it’s very accurate to compare Netflix to a book and I think that’s part of the forward vision that Hastings had. If you think about the way - what Netflix has done with what has come to be called bingeing, it basically replicates a book because it basically says you want to watch House of Cards or Orange is the New Black, you don’t have to wait and watch it at ten o’clock on Friday nights or eight o’clock on Thursday nights. You can watch it whenever you want. And, by the way, you don’t have to watch commercials. And, by the way, which means the show is longer. And, by the way, you don’t have to watch a single episode, you can watch multiple episodes. Watch it as long as you want. Eat as much as you want. Just as when you read a book. You want to read more than chapter, you read more than one chapter. So the analogy is apt and I think he was smart about that.
Read the full transcript at bigthink.com/v...
Title: How Blockbuster Killed Netflix (a controversial title)
Video: How Netflix Killed Blockbuster (what everyone knew)
The title is misleading clickbait, and unrepresentative of the video. For shame.
Its not misleading. Listen to the beginning. At the time that Netflix was first out people were choosing Blockbuster over Netflix and the competition was soo one sided that the founder of netflix went to the HQ of Blockbuster to sell netflix to them. In a sense he was surrendering which means that Blockbuster at that time killed netflix. BUT Blockbuster declined and less and less people started going to their stores and in the end Netflix came out on top. Hastings ideas were ahead of that time and I'm sure he didn't realize just how quickly that those ideas he had would come to fruition and relevancy .
GameStop.... Your next. Love: Valve and Steam
Well first, there is a major difference between your and you're. They have very different meanings. You might want to learn them. Secondly, Steam exists for the PC. The other (and better) titles are on home consoles, and if you even think about supporting DRM I will have to personally murder you. Video Games should stay on discs. The current system works, there are digital copies for people who want digital, and there are physical copies for people who want physical. The same goes for films, shows, and books.
Your comment has no merit and is intellectually bankrupt.
James Sora First of all it was a joke about how gamestops future is uncertain due to not only digital distribution in general but newer ideas about streaming video games (which is occuring on your precious consoles as well . Feel free to look joke up in the dictionary. As far as DRM your dreamboat consoles are the worst offenders in this regard. Did you completely miss what xbox tried to do with the XB1? Yes I made grammatical error omg I am worthless and have no right to live thank you for combing youtube with your ample time spent in your parents basement not going to work to fight the good fight against all us worthless human beings who would dare to type one instead of the other in a two line youtube comment. As far as threatning my life? Well I have already reported you and taken a screen shot of your comment.
James Sora you really do lead a sad life when all you can find to do with your time is spew bile on youtube over a sarcastic comment and a grammatical error. Hopefully trolling and proofreading youtube fills voids which are obviously present in your life. So much anger over a two line comment that although was a joke, is slowly occuring whether you like it or not. I am truly saddened by you and others like you whose lives are so empty and shallow that they take to the internet (anonomously) in a remarkbly pathetic attempt to bully people. I expect this kind of thing from gaming channels but I am a little suprised to find it on big think. If your new to the channel I would encourage you to watch as many of their videos as you can.
@@sorasnow650 you are not very smart are you?! On top of that talking down to people...
@@sorasnow650 That aged very well. 😂
Title reads: How Blockbuster Killed Netflix...shouldn't this be reversed? :)
Or, "How Blockbuster killed Blockbuster".. yeah
Woops. Apologies for the typo, all. Duly noted and fixed.
Big Think that's some small think right there. haha.
Big Think Still technically wrong, but a fascinating video nevertheless.
The people at Big Think don't do much thinking.
I remember renting PS2 games at Blockbuster and leaving with a giant candy bar, and the store always had that "blockbuster" smell.
Pretty fun
Right?!?!
the thing is i only clicked on the video Because of the messed up title
also Blockbuster dvd were expensive to rent and their late fees sucked.
Then Redbox came and put the nails in Blockbusters coffin.
Shouldn't the title be "How Netflix Killed Blockbuster" ?
Was just going to say that
it is now
For the love of christ everyone! Let's try to sit down and watch the three minute video before commenting about how the title is wrong.
I liked going to a store and looking at movies. It was a pain when the new viedos were out. but I liked that when i wanted an older movie I could just go and look for it. Most of the time they had a movie I wanted to see. the online of netflix is limited and they dont carry the most current seasons of shows they tend to have a very limited selection also.
Netflix still don't really have all the movies you wanna see
and so did gaybuster
HiroPiro quit talking shit! XD jk, even though I loved Blockbuster..
u need a shoulder to cry on XD hah jk
HiroPiro Do you need a crutch to keep that shoulder up? Lol.
oh yes my friend
redbox killed blockbuster. not netflix
redbox did sure but netflix along with hulu played somewhat of a part. In fact the thing both netflix and hulu show signs of destroying down the road..... television as we know it for both better and worse.
In fact netflix streaming (which, 90% of is watching shows both the original programing and reruns of other shows they stream) is estimated to be the number 1 internet related activity ( at least when comparing activity of individual site vs individual site) making up nearly 1/3 (take a wild guess what the other near 2/3 is.... WE ALL KNOW WHAT THAT IS) of all traffic and netflix is estimated to be watched more then any cable network.
Ah i get it, it's reverse order to catch our interest because it almost was true. almost is the key word here big think ;) "how blockbuster ALMOST killed netflix"
Thank you, Captain Obvious.
Why have you even clicked on this if it was sooo obvious?
Or shall I call you Captain Bitterlips Anyway?
Yeah, BigThink is really running out of things to talk about.
+AsianMassageTeacher Can i have a massage and then you love me long time?
We're working under the assumption (ha ha ha of couurrse) that blockbuster was trying to stay alive.
Blockbuster was great,netflix has shit movies!they only get 4 good movies and shows a year
Yes, this man got it 100% correct.
It's not often you see a new start up company destroy an established movie renting corporation that had no real competition.
But Netflix has indeed killed Blockbuster because the executives of Blockbuster were a bunch of airheads. They could not see Netflix's innovating vision that would surely become the norm within a few years thanks to digital sharing of media. Blockbuster idiots really thought their rental stores was not an outdated business model lol.
Another reason why Blockbuster was such a massive failure was their stupid pricing and late fees. Netflix services were WAY more flexible and accommodating and the cost of their services were great, which attracted tons of former disgruntled customers of Blockbuster who have been wronged by the company.
Very similar trends in business can be seen with Amazon, which is been responsible for closing down of many bookstores like Barnes and Noble and Borders. Barnes and Noble will die out within a year or two I am sure, because their model is no different than Blockbusters.
The internet has become a very powerful business medium. Just look at how it has drastically altered the music and DVD industries. I don't think I've purchased a music CD in 10 years! Every music or movie I enjoy are streamed onlined thanks for sites like Netflix, Spotify, Hulu, UA-cam etc. Advances in the cell phone technology has made life even more convenient because I can now simply install apps and enjoy my entertainment wherever and whenever. Companies that respect the fast progress of technology will thrive, those than don't will quickly die out in obscurity. Blockbuster is a great example of this, and soon Barnes and Noble will be another example!
Even before Netflix, Blockbuster was dying. I remember renting games when I was a little kid, it was a desert in the Movie/Dvd area. Blockbuster made a couple of mistakes. Putting unnecessary limitations on their customers for one. And the price for renting went up a few dollars. I remember for two games it was like $15. If you got a a couple of movies with that you're looking at spending $25. The Blockbuster that is near my house is now a Carpet place.
A carpet place? Wow, Blockbuster is really expanding into different markets.
i hope your being sarcastic.
My blockbuster turned into a bank.
mine turned into a health care center.
Taunted By No One Ended Up A Shogun
My turn into a porno shop
bingeing on Pokemon right now
Pro title job.
The Big DUH
Nothing against this guy, but I don't think this really constitutes 'big think'
Nail in the coffin. I thought that Block Busters real downfall was the failed deal with Enron? they lost a lot out of that and was how they were going to move onto the internet... of course I read that online so it may not be true...
It's true. I was working for Blockbuster when it was going on. It was the worst kept secret ever. The doofus brass lost a lot of money on that concept, so they became "gun shy" to online stuff...but they knew it was coming.
should switch title to how netflix killed blockbuster
Next video --- How the Confederacy won the Civil War...
Goodbye blockbuster you wont be missed... $20 bucks for a video tape for 1 day wtf mate...
fuck video stores period.
Netflex steal there program's you know. , support a company that stills products why it's cheaper
+Ben Chesterman Blockbuster and video stores are dead, move on!
I miss Blockbuster Video and so many people miss it as well.
First video I watched since I subbed after seeing an Ad. "how netflix killed blockbuster" I'm soooooo much smarter for knowing something I already knew. I hope the other videos have something I can "think big" about
Yeah, this video merely told us obvious things that everyone already knows.
Good job.
Ya Netflix, cause I sure wanna watch 20+ year old B movies and only have 1/1000th of the selection choices as a video store. Yay technology!
Do you think it's going to be that way forever ?
Yeah i agree with West, they'll change it of course. For money they'll add more movies. They may change how they charge or the method they send physical dvs but they'll add more streaming movies. Right now they're a bit slow, especially on TV shows that are adding new seasons constantly. Since Hulu is already on top of current TV shows they'll be netflix's competitor unless they can update their shows and movies faster.
Streaming sucks IMO. The quality is just not their. Most have tearing or frame drops along with the added compression. Even HD does not look as great as coming from a disc. The benefit is that many might have more access to stuff they would have never watched. Like the complete series of Air Wolf....
There's B movies on netflix? Since when, no there is not; you don't have a clue what your talking about. I wish there was that would be awesome.
I bet your punk ass hasn't even seen a b movie as you clearly don't have a clue what your talking about.
Haha - Go look up Frankenstein's Army, Women Who Kill, Mean Girls, Lilo & Stitch, The Last Days on Mars, 20 Feet From Stardom. These are absolute trash - B or even C movies. Netflix is flooded with them. Sure there are great titles from 20+ years ago that we've seen already but in general they have the B version.
Such as Batman, they don't have any of the movies online, before they had Batman and Robin. They have some cartoons but not the best from the 90's. I'm just saying if you took the bullk of the movies on Netflix weighted against the good most of its crap.They have a few big name cartoons but really in the scope of nerdom they really are the b-level cartoons.
Blockbuster killed themselves. They overcharged and fraudulently charged late fees to their customers. They were also late to the game, in every technology advance. I don't miss them AT ALL!!! Good riddance.
Evolve or die.
But usually, the extinction event doesn't happen so suddenly. Who knew that broadband would improve so rapidly?
Really quickly:
You portray Netflix as a visionary company, they are not. Around that time I had interviewed for Netflix and I told them they should move all movies to a server and provide streaming service. They were not interested at this early stage in prototyping a streaming device to enable video delivery. They were more into “shipping” DVDs.
Less than a year later, new startups in Silicon Valley started developing such devices that included DVR capability. Some of these companies enjoy royalties for their hard work today.
Netflix met its challenge Amazon cloud, bit torrent and a host of other innovative technologies are chipping away subscribers.
Another day in the Valley…
I remember going to Blockbuster or Video EZY to rent a new release movie only to find out they were all rented out! It felt like a premature orgasm haha. And the disappointment I had going home knowing that I have to drive back there again to rent the movie. Those were the days unfortunately, and thank God for Netflix by solving those horrible pain points for customers. Reed Hastings a BIG thankyou and your team for being a great innovator. Keep up the awesome work!
This obvious shit really needs to be analyzed?
... I'm just still surprised that it never caught on that Netflix has been obsolete for years!!
Vodly has literally ANY Movie or Show you can think of for FREE! All completely streaming with no commercials as well!
Netflix didn't kill Blockbuster, Red-box did. Blockbuster did have the "Netflix" extension eventually, but Red-box dominated the movie rental arena along with game rentals.
forget Blockbuster's DVD services. they were the ONLY good source for sampling games. now we're stuck with online demos of a limited selection. Then pay 60+ bucks for a game without testing it. the America's (Canada too) needs Game rental stores. My game collection is hurting my finaces because of Blockbuster closing.
In point of fact, Blockbuster WAS seriously looking into going online, and knew the brick-and-mortar stores would be phased out. They even sunk a bunch of cash into partnering with another prominent company starting a prototype system well before Netflix even became big....that company though? Enron! Yeah, shows BBV's knack for making shite judgement calls. I know, because I worked for BBV when they were developing it. Always thought it was weird they were doing something with The Crooked E. :p
Hopefully the Internet Providers (Comcast) don't knock Netflix off with with whole internet "Net Neutrality" controversy going on.
Blockbuster refused to accept the evolution of technology.
In the same light, everything is slowing becoming more and more portable. In time, people won't even watch their programming on their home computers, they will watch it all on laptops, tablets, SmartPhones, and products like Google Glass.
Companies that offer streaming support for these technologies will survive longer than those who don't.
I use to like blockbuster. The blockbuster near my house was cheap for movies and games and always gave me deals caught I rented so many games from them a month. I use Hulu Plus and never really got into Netflixs. I just can't rent games no more. I tried the game website that's like netflix and always got scratched games. Redbox also killed blockbuster along with netflix and Hulu around where I live.
To decline was a complete failure of the board of directors in Blockbusters. It was pretty obvious that things were going digital and the internet would play a big role in the world, as it does today. Failure to recognize and seize this opportunity means they didn't deserve it. They probably would have made a mess of it anyway...
i ordered netflix and i started looking for some movies i wanted to see, and they weren't there or i had to get a DVD plan for additional money. i was just thinking, not to long ago, that i wished i could go to Blockbuster to rent the video. i looked at the red box, and the movie wasn't there. i don't want to subscribe to another Netflix warehouse of movies just to see one movie or just buy it, but then what is the point of netflix.
in case you're wondering: the movie is Tigerland.
i wonder why they wouldn't stream it and why it's in dvd form only and does this mean that the other online movie stores (idk what it's called, if you know please tell me) wouldn't have it.
i'm old enough to remember the small mom and pop movie shop and the porn would be behind the curtain. i remember sneaking in. everything is changing so much. things are suppose to get easier, but sometimes it doesn't.
i hate calling the bank and getting a machine. i just want to speak to a person!! why do they make that so hard?
(sigh) anyway
I miss blockbuster i wish they went online because I hate netflix's thing were it takes 6 ( probably longer )months after it comes out on DVD to be available
In my experience it was a bit diferent. I used to go to the theaters spend 5€ for a great movie, and them for those I was only middly interested I would go to movie stores and rent them. Mostly were 2~3€ after 3months. And I was fine with that. What happen was that they started to be as expensive as theaters. I add to rent them for 5€ (or close to that amount) and the price would not go down for 6months, sometimes even a year. By that time I lost interest and/or prefered to spend my money going to the theater/cinema.
I only started using the internet, because I had no choice. Quality was bad, but the interest was fulfilled. And what's worse, over the years I came to realize that many movies weren't even 'that' good to be in cinemas. Ence, nowadays I'm much more selective about what I do PAY to see.
I know right the cable boxes make my inner movie nerd long for days of yore not at all infact if you want theres even spicy red grown up specialty ones for those stag films to be piped into mom and dads room if they wanted to big old video places never had a chance when that technology hit the market.
I don't think the people who committed negatively on the video actually watch the video, cause they all have the same idea that the title is wrong. Yet, the man clearly illustrated in the beginning of the video of the early days of Netflix and blockbuster, not on the present... I think they should give it a chance before scrutinizing the video. ..
Blockbuster did try to do online too little too late though. I loved Blockbuster by my house. They always had what I wanted in Blu-ray and games, but that is why I'm sure they went out of business.
Interesting story. Actually inspiring.
I still don't see how Blockbuster killed Netflix. Perhaps the video name should be changed?
The title should be how Blockbuster could have killed Netflix.
Netflix didn't reach out to Blockbuster in the late 90s. And it didn't take a couple of years for Blockbuster to go under either.
That was one of the biggest frustrations I had with Blockbuster. The big new films that came out would always be sold out in the first week or two.
Last time I went to Blockbuster was the weekend before the release of Star Wars: Revenge of the Sith. I wanted to rent the other 5 Star Wars...they had none in stock and the waiting list had 20 names so I said fuck it.
I think the title is messed up, shouldn't it be how netflix killed block buster?
Refresh my memory whats this Blockbuster video you speak of is that the place that was packed wall to wall with nothing but family titles in many locations ? Blockbuster may have had netflix dragged to the bottom but most of were thinking why is this kid in the deep end he cant even swim if its the other Big chain videostore that closed its doors for good years ago then pardon me.
Interesting I didn't realize the history between Blockbuster and Netflix and how it used to be the other way around.
Isn't the title meant to read, "How Netflix Killed Blockbuster"?
These video titles are way too confusing. I'm unsubscribing.
I hate to be an asshole, but did we really need someone to explain to us why Netflix is better than Blockbuster...
similar to how governments/multi nationals notice how the eco system is dying and do not invest .
= fail, but on the greatest scale.
Jesus so many ppl said the same things about the title, and ik its changed now, but even if it wasn't, jeez, lol
Correction: Netflix killed Blockbuster...
Blockbuster could have been Netflix, if they had any vision.
many companies don't have the vision to see the next step. I still wonder why iTunes still exist.
of course sometimes it doesn't work to upset an existing model for a maybe business. just remember windows 8
Another thing I seem to recall them doing is going all Stanus Berathion on folks with late fees then kissing our asses to come back when they saw the ship sinking
Your book analogy fails for one very crucial reason:
Movies are cool and books SUCK
So why can't I watch a lot of netflix content in canada but I used to be able to rent the same content as the states from blockbuster?
Now Netflix has killed Blockbuster. Ironic!
I use to love going to blockbuster as a kid. Renting video games mostly.
block buster was stupid to not partner up with netflix look it them now gone & forgotten
so old school, purging about distruction in his brooks brothers clothes :-)
that's what happen when you live under a rock.
Who ever wrote the title dun' goofed. Yes he's not one of the big thinkers of the big think team.
Pre-watching prediction: Netflix killed Blockbuster by providing the same service cheaper and more conveniently.
Well, I wasn't wrong but I forgot to mention that Netflix also has any movie you want in stock at any given time.
Also something about books.
That's not Netflix's fault - that's movie companies
I thought blockbuster made a comeback after reading the title,hehe
Netflix Killed The Blockbuster Star
RIP Blockbuster(2014)
Blockbuster did go online. The old CEO stopped late fees and started up an online service, but then the board fired that CEO and hired a different guy who undid the changes that they saw as "unprofitable". you screwed yourselves blockbuster
I completely agree with you I worked at Blockbuster when they went online. They kept raising the online subscription fees without telling customers and it made a lot of people angry. They put themselves out of business.
TITLE IS WRONG :) ... good story
Netflix - for those who don't know how to use torrents.
I miss blockbuster :( netflix is shit
the title got my attention by stating the reverse
Correlation is not causation.
theres a netflix ad while im watching this
Lol they changed the video title
i think the title is backwards
It's amazing how much more people like the video just because the title was changed. :P
what was the title before?
Eva S How Blockbuster Killed Netflix.
I love Netflix.
Justin Katsopolis have you watched devilman crybaby 😏
No
I love Blockbuster and Hollywood Video.
Dyslexic am I not
That's was ironic.
I wish all of Netflix's movies were on instant streaming instead of having some only on DVD. I know it's how they make money, but I'd be happy to pay the same price to have everything on streaming.
"They would have disseminated Netflix" o.O
This aged really well
2 views? wow am I early.
Yes, it is obvious how Blockbuster fell. But I think this is a neat video, mainly because of the simply explanation for those not aware, as well he has a really cool voice. Never thought of the book comparison either, cheers Ken & folks.
I actually was sad when my local Blockbuster shut down. I used to go there to rent video games and rent newly released movies.
What Netflix does well is that it allows people to watch certain shows whenever they want, however long they want. That's good and all but one of the reasons why i dropped Netflix several times is because it rarely updates (once a week), and what they update is rarely good. They never have any up to date movies, now a days I watch new movies on demand.
Though I definitely think Netflix is worth the money.
the title is wrong.
blockbuster bay
sweet title job bros
Risk aversion.