Movie Watching Trends

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In recent years, the way people rent the newest movies and video games has changed and progressed quite a bit. The idea started in the 1980’s with the idea of video stores. Blockbuster was one of the largest of these store franchises. The way these stores operated was you chose a movie or movies and paid an initial fee, then you had a set amount of time to return them, or you accrued late fees. These late fees and inability to adapt is part of the reason for their ultimate collapse in 2013. Another reason for Blockbuster’s collapse was the technology of redbox and netflix taking over the industry.


Unfortunately for Blockbuster, they helped with their own demise. Back in 1997 when Netflix was started, Reed Hastings, CEO of the company, knew the pain of late fees well. In fact, it’s what inspired him to create the now-household name. Hastings was annoyed with a $40 late fee after he had rented ‘Apollo 13.’ A tweet from several years ago revealed that Hastings was just trying to enjoy a Ron Howard/Tom Hanks classic space flick and next thing he knows he owes the video store $40 just because he got busy for a few days and forgot to return the movie on time.


There is no better reason to start a business than trying to solve a problem or frustration in your own life, and Hastings did just that. He had just recently sold his first company for $750 million, so it wasn’t even about the money, but rather the inconvenience of having to deal with timing the returns of movies he was renting. What if he didn’t have time to watch it before it was due back? What if something came up and he just couldn’t get around to running the video back to the store? There had to be a better way.

Enter Netflix: A humble 1000 title online DVD rental library with free shipping, no due dates, and no late fees that quickly expanded during the dot com boom of the late 90s.


But after a few difficult early years, Netflix almost ended up selling itself to its largest competitor at the time, Blockbuster. Netflix was looking to partner with the rental store giant, offering to setup and run a DVD-by-mail service as an aside to physical retail locations. Fortunately for everyone, Netflix was laughed out of the Blockbuster offices, and 900x in value later, Netflix is thriving while Blockbuster is virtually no more.

One of the key factors of Netflix’s success has been their pivot from DVD rental delivery to digital streaming. Making the move was a major shift from fringe benefit for their subscriber base to the key functionality we’ve all gotten used to using. This move has of course paid major dividends but Netflix knows it can’t last forever. Netflix has once again begun to retool their business strategy, as third party content providers continue to get more and more stingy with streaming distribution, making it either massively more expensive or almost entirely inaccessible to stream titles that belong to other content owners. Thus, the service has decided to focus heavily on creating its own original content, an expensive but hopefully rewarding effort.

All this goes to show that the littlest inconveniences sometimes turn into massive multi-national billion dollar businesses.

Along with Netflix, several other methods were created to bring entertainment home in the easiest way possible, for the masses. Some of these names include: Hulu, VUDU, HBO now, STARZ, Redbox, Amazon Fire and several more. There are several more companies trying to make viewing new movies even easier (and lazier) which may eventually put some of these new on-demand services out of business.As technology progresses, so does instant gratification, so maybe the pattern will continue and these services will, also, get “blockbuster-ed.”