Rory Sutherland talks about Blockbuster missing the chance to buy Netflix for only $50M.

In the early 2000s, Blockbuster, the dominant video rental chain, had the opportunity to buy Netflix but passed on the deal. At the time, Netflix was still a young company, struggling to gain traction with its DVD-by-mail service. In 2000, Netflix's founders, Reed Hastings and Marc Randolph, approached Blockbuster with an offer to sell their company for $50 million.

Hastings and Randolph proposed that Netflix would handle Blockbuster’s online operations, while Blockbuster would take care of the physical stores. However, Blockbuster's executives, confident in their brick-and-mortar business model, did not see value in Netflix's digital approach and declined the offer. At that time, Blockbuster believed that its in-store rental business was strong enough to weather competition.

This decision is now viewed as a major missed opportunity, as Netflix went on to revolutionize the entertainment industry by pioneering online streaming. Meanwhile, Blockbuster struggled to adapt to changing consumer preferences and eventually filed for bankruptcy in 2010, marking the fall of a once-dominant brand.

Today, Netflix is worth over $150 billion, making Blockbuster’s rejection of the offer one of the most famous business blunders in history.

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