Blockbuster, Netflix, Hastings Randolph discussed on Land of the Giants
I'm Peter Kafka and I'm Ronnie. Mola and this is landed the giants. The net flicks effect a podcast on Netflix's disrupted. Hollywood change the way we watch TV and movies. And how it should have been squashed by giant competitor, but ended up turning the tables and killing the video store. Okay Peter. Let's go back in time long. Before we had netflixing chill, we had blockbuster nights. Remember this tonight. Make a blockbuster. In the nineties and early outs, blockbuster was the world's largest video rental chain. It was a huge part of American culture at its peak, it was bringing in six billion dollars a year in revenue and had more than nine thousand stores around the globe. It was the place to rent movies it was. Social place like teens would meet their. You know people you know because that was one of the few things that you could always do as a high school student. Was You know you could get together with your friends and rent a movie and go to the cool, parents, house, and watch it where there's a copy of the wiz that I would like hide in a corner at blockbuster because I always wanted to be there when I come back for, and we would go in there her car then go into blockbuster and pick out a movie, and then we get a little treat you know I don't know. We pick two to three movies scary WanNa funny one and then in action. Nobody has the movie I want I. Even Video Blockbuster probably hasn't I mean? We have over ten thousand videos? Five six o'clock on a Friday night. Phones are ringing off the hook. It's never what do you have? That's good. It's always what you have. That's new that last voices Jason Bailey nowadays. He writes about movies for places like vulture in the New York Times, but years ago, he used to work at a bunch of video stores, including blockbuster, which he says wasn't as great as we might remember. I have much more nostalgic for the video store. Then I do for blockbuster in particular which really in a lot of ways. Ways killed the video store, flattening it into the sort of McDonald's version of the video store, right? That's what I remember about. Blockbuster killed my local video store replaced with blockbuster, which I did not like blockbusters were everywhere, and everyone rented from there, but that didn't mean it was a great customer experience, one of the big things that you always hear people who who don't remember blockbuster through a Golden Glove nostalgia talk about where the late fees or as they tried to rebrand them additional day fees or additional rental fees. They were outrageous. Boxer made a ton of money on late visas or additional day fees running. At one point late fees made up seventy percent of blockbuster prophet, and along with this highly fees, there are a long list of other problems limited new releases, long lines, shitty customer service all which is lousy for customers, which also made it lousy for employees. I got cursed out a fair amount. Again for you know just doing what I was told to do by corporate, but yes I would, I would be told that you know that. We were monsters that we were bloodsuckers. I had that thing back on time I saw you. You take it out of the box I was like I got called out like that I had people tell me I saw you in here when I dropped it off. You tell me you didn't check it in on time. I'm not paying that if it got heated, but this is all factored into blockbusters business model. The company even had a term for it managed. Dissatisfaction managed to satisfaction is a term that John Antioch. Oh the CEO Blockbuster <hes> explained to me, and that is is long as you give a consumer and. And of what they want. They will ignore the fact that they're not always getting what they want. This is unique heating. She's a journalist who covered enough for Reuters she also wrote a book and made a documentary about Netflix's history blockbuster understood that only twenty percent of customers who came in would get the movie that they wanted, and they would have to get something else the other eighty percent of the time. They weren't happy, but they weren't horribly angry. Managed dissatisfaction is one of the great corporate euphemisms for screw you give. Give us your money. You are ever going to hear and if you can't remember what it was like to go to. Blockbuster occurred analogy. Be Like an airplane. You WanNa. Airplanes are like it sucks every way, and if you want to improve it in any way, you have to pay additional fees for everything that is blockbuster in a nutshell in the nineties, yeah, customers felt trapped, and with all the smaller mom and pop stores being squeezed out. They didn't really have a better alternative, and then all of a sudden they did. Again you've gotta remember. That netflix emerged in the late nineties when the Internet still felt pretty new. Amazon was just becoming release accessible selling books online. They're doing it cheaper than the competition and they didn't have to operate stores, so Reed Hastings and Marc Randolph to tech guys in the bay area are surveying the landscape and they thought hey, we could be the Amazon of something else. There's a better way to rent movies as many as you want. Go to Netflix DOT COM. COM Bake a list of the movies you want to see and about one business day you'll get three. DVD's kept him as long as you want. Without late fees DVD's had just come out. And suddenly there was this new way to watch movies that didn't involve these bulky VHS tapes. DVD's were smaller, more durable, and you could ship them for price of a postage stamp. So? Hastings Randolph thought. Hey, we could be them on of movies. This may seem obvious now, but at the time this was a big deal. Suddenly instead of having to go to the store and deal the crummy customer experience, he could stay home. You can hit a button and someone somewhere sent you the dvd you wanted instead of the one you had to settle. for which Netflix customers loved by the way they tended to order? The kind of movies at blockbuster didn't feature or even carry it all they had all the indie movies and older movies and blockbuster was focused on what was new.