Blockbuster Video: 1985-2013

Dish Network, the parent company of Blockbuster Video, announced yesterday that it will close 300 Blockbuster stores in the United States by January of next year. Fifty stores still owned by franchisees will stay open, and Dish will continue to use the Blockbuster brand on a streaming-video service, but for all intents and purposes, this is the end of the line for a video-rental chain that was once the country’s largest.

Even now, it’s hard to feel warm feelings for a Blockbuster. The company was a Borg-cube dedicated to pushing big-time Hollywood product. They frowned on NC-17 movies and foreign films and employees with long hair. If you wanted those things, you could go somewhere else, until you couldn’t, because Blockbuster also frowned on sharing any marketplace with a “somewhere else.” They transformed the home-video business by plowing under the competition, then failed to adapt fast enough as that business continued to change. Mourning them is like mourning some big, dumb robot that has succumbed to rust after standing all night in the rain.

By the end of this year, 2,800 Blockbuster employees will lose their jobs. There is no other aspect of Blockbuster’s passing you could really call “sad,” unless you’re like me and you feel a weird chill each time you live through the disappearance of that which was once ubiquitous, especially in the physical-media-retail sector.

Time only moves in one direction, and my daughter will never set foot in a Tower Records. Or a Waldenbooks, or a Coconuts, or even a Borders. All those chains were gone by 2011, victims of Amazon and Netflix and iTunes and our hunger for convenience, which is almost always the force that makes technology’s wrecking ball swing.

Blockbuster really hung in there, though. The stores didn’t so much go out of business as waste away, staying open for what seemed like months or years while slashing prices, then slashing them again, on bins of previously viewed DVDs you could never imagine anyone wanting to rent, let alone own. Going through those bins was always educational. Digging for bargains, you’d come across the 30 copies of Mimic 2 the store got stuck with when the music stopped, and the flaws in the video-store business model would become that much clearer.

A behemoth’s low-rent legacy: Everything must go. Ancient Red Vines as hard as bridge cables. Microwave popcorn in cellophane envelopes, somehow pre-rancid, each package like a death-threat letter written in butter. Unpurged VHS tapes, in those white Blockbuster boxes, the kind known in the trade as “clamshells,” now a perfect word in that it evokes fossils, evolution’s discards. And finally the stores themselves. The Blockbuster store of which I used to be a member on Flatbush Avenue in Brooklyn is now a fancy pizza place with a commitment to sustainable agriculture, and the one at the corner of Vermont and Sunset Boulevard in Los Angeles is now a used-clothing store. Solid business models, in that you can’t stream a pizza or a pair of pants, at least not this year.


Rewind:

Andre Blay had a video-duplicating company in Michigan, Magnetic Video. He secured the right to sell pre-1973 titles from the 20th Century Fox film library on videocassette. Blay’s Video Club of America, as advertised in TV Guide, soon had over 9,000 members.

George Atkinson had a 600-square-foot storefront on Wilshire Boulevard. He rented films and projectors. Atkinson read about Magnetic Video. If people would pay him $25 to rent a movie on film, surely they’d pay something to borrow one on cassette.

He scraped together a $10,000 stake and purchased 50 Betamax copies and 50 VHS copies of Magnetic’s first 50 video releases, including The French Connection, Butch Cassidy and the Sundance Kid, The Sound of Music, and M*A*S*H.

His Wilshire store became Video Station. The first video store announced its arrival with a one-inch-wide ad in the Los Angeles Times. A membership cost $50 a year, or $100 for a lifetime membership, and individual rentals were $10. Atkinson believed renting was the way of the future. But early on he made much of his money selling the Fox videos to people who were willing to pay $50 to $70 retail for a movie on tape — what he’d later call “your Cadillac and Mercedes crowd.”

By the mid-’80s, Betamax had lost its war with VHS. The price of VCRs dropped from around $1,400 (circa 1978) to as little as $200. By 1985 over 28 percent of all U.S. households had one. Between 1983 and 1986, the number of video stores in America grew from 7,000 to around 19,000.

“The VCR and the prerecorded videocassette set hearts on fire in entrepreneurial breasts all over the land,” Gail DeGeorge wrote in her 1995 book The Making of a Blockbuster: How Wayne Huizenga Built a Sports and Entertainment Empire from Trash, Grit, and Videotape. “Americans from every imaginable walk of life cracked open their nest eggs, remortgaged their homes, and put the arm on their parents, siblings, and in-laws in order to become the proud proprietors of Video Castles, Connections, Corners, Hutches, Huts, Palaces, Patches, Places, Shacks, Sheds, Sources, Spots and Stations.”

David Cook had a company that made database software for oil companies. He’d taken it public in ’82, then watched it wither after OPEC price cuts crippled the oil business. In some versions of the story he runs the numbers on a mom-and-pop video store as a favor for a friend, takes note of its limited selection and challenging browsing experience, and becomes intrigued. In others, the idea of a clean, well-lit place for renting movies is suggested by his wife, Sandy, a movie buff.

Either way: On October 19, 1985, Cook opened the first Blockbuster Video store in a strip mall at the corner of Skillman Street and Northwest Highway in northeast Dallas, a high-traffic intersection surrounded by apartments and townhouses full of young people with money to spend. There’s a Walmart Supercenter there now.

Cook spent $800,000 to outfit the first store. Sandy Cook is said to have selected the 10,000 titles the store made available for rent, and conceived of the blue-and-yellow color scheme and the idea for the ripped-ticket logo, which was designed by illustrator Lee Dean of Allen, Texas, and hasn’t changed since 1985. Calling it Blockbuster Video was also Sandy Cook’s idea.

“I didn’t like it at first, like the first hour,” DeGeorge’s book quotes David Cook as saying. “The more I said it, the better it sounded.”


The beginning of the end came a little over a decade later, in Santa Cruz, when an engineer named Reed Hastings returned a long-misplaced VHS tape of Apollo 13 to his local video store and was charged a $40 late fee. Then he went to the gym. “I realized they had a much better business model,” he’d say years later. “You could pay $30 or $40 a month and work out as little or as much as you wanted.”

Hastings had just sold a software company. He started thinking about how a mail-order video-rental business might work. As an experiment, he packed a CD in an envelope and mailed it to his own home address. When it arrived intact the next day, he knew he was on to something.

Hastings started a company called Netflix. Blockbuster passed on the chance to buy it for $50 million in 2000. That year Blockbuster collected $800 million in late fees, which was 16 percent of the company’s total revenue. Netflix sold its one millionth subscription three years later. It’s currently worth about $20 billion, and Hastings himself is worth around $280 million.

After ignoring Netflix for too long, Blockbuster spent its declining years chasing Netflix like Snoopy did the Red Baron. The big selling point of the DVD-by-mail business they launched in 2004 was that you could return and exchange your DVDs at any Blockbuster store, an advantage that seemed to matter less and less as thousands of Blockbusters closed their doors.

They did away with late fees in 2005, and announced the decision with a TV ad in which an angry mob converges on a Blockbuster, angrily chanting “NO MORE LATE FEES,” then falls abruptly silent as two bemused Blockbuster guys unfurl a banner that says the exact same thing. Then it’s V-J day in videoland. A woman kisses a nerdy stranger. An older black man nods his head like It’s about damn time! Roy Orbison sings “It’s Over” on the soundtrack, one of the Blockbuster guys crowd-surfs in his blue polo shirt, and as fireworks explode and people dance in the street, an announcer says, “Someday, you’ll remember where you were.”

You were probably at your computer, which from now on is where you’ll remember being when you remember things like this.

It turned out that Blockbuster had only eliminated some late fees. If you kept a movie or a game for more than seven days you’d be charged between $8 and $20. Forty seven states and the District of Columbia filed suit, claiming the “No Late Fees” campaign was a misleading claim; Blockbuster settled the case without admitting wrongdoing. In 2010, it quietly reinstated late fees, but called them “Additional Daily Rates.”


Rewind: By 1986, there were Blockbuster stores in Chicago, Atlanta, and Detroit, and new ones about to open in Milwaukee, Minneapolis, and St. Paul. They started selling franchises.

The Zale family, of jewelry-store fame, owned 23.

President George H.W. Bush’s son Marvin was a member of a partnership that owned four.

A Dallas investment banker named Scott Beck bought in, too. Before long, he brought the idea of a more significant investment in Blockbuster to a colleague named John Melk, who put it in front of Wayne Huzienga.

Huzienga was a college dropout who’d gone to work for a garbage-collection company in Pompano Beach, Florida, in 1960. Two years later he’d convinced his employer to sell him a single garbage truck and, for $500, a share of the local garbage routes. By 1983, through rapacious acquisition, he’d built Waste Management International, the country’s largest waste-disposal company. He retired from WMI at 46, and began applying the lessons he’d learned from the garbage business in other areas, buying up and consolidating mom-and-pop outlets in various service industries — lawn care, pest control, portable-toilet rental, dry-cleaning, bottled-water delivery.

Initially he didn’t see the point of the Blockbuster deal. Home video still had a reputation as a seedy business built on the appetites of creeps in raincoats. Huzienga rarely went to the movies and didn’t own a VCR.

But at Melk’s urging, he stopped into a Blockbuster store in Chicago while in town on business. According to corporate lore, he immediately noticed how different Blockbuster was from the shabby video huts of old, thereby inspiring an enduring Blockbuster slogan. The actual wording of “Wow, What a Difference!” is credited to Tom Gruber, a former McDonald’s executive who joined Blockbuster in 1987. In his book From Betamax to Blockbuster: Video Stores and the Invention of Movies on Video, Joshua M. Greenberg characterizes the line as “a deliberately cheery jab at the image of the independent video store with its limited selection and morally ambiguous back room.”

In 1987, Huzienga and two partners purchased a controlling interest in Blockbuster Entertainment for $18.5 million and immediately set about acquiring competitors like the Las Vegas video-superstore chain Major Video and Movies to Go, a 29-store chain based in St. Louis. Over the years, Blockbuster assimilated a slew of other, smaller chains, including Southern Video Partnership, Video Library, Video Superstore, Video Express, Erol’s Video, Applause Video, Movie Emporium, Cityvision, and Video Ezy.

By 1990 — the year Penn State faced off against Florida State in the first annual Blockbuster Bowl — there were 1,300 Blockbuster stores in America.

By 2004, there were 9,000 Blockbuster stores in America, which was the most there would ever be.


They were good at absorbing or steamrolling smaller video chains. They tried selling DVDs, selling and renting video games, partnering with Radio Shack to sell consumer electronics. They bought up two record-store chains and opened the first Blockbuster Music stores in 1992.

And they tried to become a media company, 20 years before Netflix succeeded in transforming itself into a movie studio. They bought Republic Pictures and Aaron Spelling’s Spelling Television and sought a merger with Viacom, although by the time that deal got done Viacom was acquiring them instead, in 1993, for $8.4 billion. Huzienga wept onstage at a shareholders’ meeting, then took questions about the mammoth sports complex he planned to build in Miami, nicknamed Wayne’s World. He was the owner of the Miami Dolphins by then; after leaving Blockbuster he’d become the first owner of the Florida Marlins and the Florida Panthers hockey team.

In 1997, Blockbuster broke ground on an 888,000-square-foot office and distribution center on a 65-acre campus in McKinney, Texas, where state-of-the-art cross-belt and tilt-tray sorters moved 100 million units of product each year along five miles of conveyor belt.

Viacom took the company public in 1999. Blockbuster CEO John Antioco rang the bell at the New York Stock Exchange, accompanied by actress Rene Russo, star of the just-released remake of The Thomas Crown Affair, and a person dressed as a comically oversize Blockbuster rental tape. According to a press release, Blockbuster also threw a party on Broad Street outside the Exchange, featuring such attractions as 5,000 video boxes arranged to form a blue-and-yellow brick road, 12-foot-high balloon letters spelling out the word “BLOCKBUSTER,” and the chance to mingle and pose for photographs with celebrity look-alikes of Whoopi Goldberg, Cher, Charlie Chaplin, Humphrey Bogart, Jodie Foster, Robert De Niro, Danny DeVito, Joe Pesci, and the Marx Brothers.

You want movie magic? Here. Here is a Danny DeVito look-alike.

At the end of “The Swish,” from the Hold Steady’s debut album, Craig Finn sings about making it a “blockbuster summer.” If this had anything to do with home video, it will puzzle future listeners, like the bit in the “Homerpalooza” episode of The Simpsons where Cypress Hill’s B-Real announces from the stage that if a lost child goes unclaimed, she’ll become property of Blockbuster Entertainment. Dead links.

In 2008, Blockbuster tried to buy the equally embattled electronics retailer Circuit City, which was itself a few months away from bankruptcy and closed its last store the following year.

In 2010, corporate raider Carl Icahn, who’d put almost $191 million into Blockbuster since 2004, sold his shares of the company for almost 97 percent less than he’d paid to acquire them. He later called Blockbuster “the worst investment I ever made,” citing its consistent failure to adapt to new technologies. Blockbuster filed for bankruptcy that September. In April 2011, Dish Network bought the company for $320 million and began shuttering all but the 500 most profitable Blockbuster stores.

A few months later, Netflix announced plans to turn its DVD-by-mail service into a separate product called Qwikster, and subscribers briefly revolted. Blockbuster, finally seizing a moment, attempted to coax disgruntled Netflix users across the street with a new slogan, the orphan-tugging-your-sleevish “Say hello to Blockbuster again.” Not that many people did.


Rewind: Blockbuster’s first distribution center, the one David Cook built in Dallas for $3 million in 1986, was designed so that every piece of a new Blockbuster store — the tapes, but also the fixtures, and even the toilet paper for the restrooms — could be loaded onto a truck in eight hours. They had the capacity to do this three times in 24 hours. The trucks were packed so that when they arrived at their destination, a new Blockbuster could be up and running within a day.

By 1989, a new Blockbuster store opened in America every 17 hours.

“Here We Grow Again,” said the signs on the windows.

They had all the character you’d expect from a store basically squirted out of a tube. But even a magicless place can catalyze formative experiences if it’s all you have. In the world before the Web, kids in places without hipper options discovered On the Road at the Waldenbooks by the Mrs. Fields, bought Horses and It Takes a Nation of Millions to Hold Us Back at Strawberries or the Wherehouse, and countless budding cinéastes undoubtedly began their education at a Blockbuster.

That kind of education would always have limits. The fact that Blockbuster didn’t have an “Adult” section set it apart, as a business, from smaller video stores, many of which secretly depended on it. But the company also made headlines in 1989 by refusing to stock Martin Scorsese’s The Last Temptation of Christ — citing “a heavy number of unsolicited communications from Blockbuster members by telephone or letter asking us not to carry the film” — and again in January 1991, when it said it wouldn’t carry movies with the NC-17 rating, which had replaced the “X” designation the previous September. So even as the Internet began laying out a smutgasbord on every desktop in America, Blockbuster continued to be a video store where consenting adults could not rent Showgirls.

Which is odd, because when I think about the parts of my own cinematic education in which Blockbuster played a key role, I think about nudity. The other important thing about the pre-Internet age was that unless you knew a guy, or knew a guy who knew a guy, obtaining anything resembling pornographic material required almost Tom Sawyerish ingenuity. A friend of mine went to the same ancient Japanese barber and got the same awkward brush cut every few weeks, not because he thought it looked good but because, more often than not, you could sift through the pile of outdated magazines in Mr. Asano’s waiting area and walk out with the odd issue of a men’s-interest title tucked under your jacket.

But there was still risk involved. You were shoplifting something, even if it was a trashed Penthouse that wasn’t technically for sale. The advent of Blockbuster removed the danger and inefficiency and the chance of being caught and scolded by a thousand-year-old Japanese barber. No Blockbuster had saloon doors leading to a forbidden room of adult entertainment, but they were pretty cool about renting R-rated movies to kids. My friends and I developed our own shadow canon of mainstream Hollywood movies that happened to include pruriently interesting passages. Like crate-diggers scouring obscure LPs for that single perfect drum break, we hipped each other to the relevant parts of Scenes From the Class Struggle in Beverly Hills and The Rachel Papers.

We rented John Landis’s debut feature Kentucky Fried Movie from Blockbuster a hundred times, screened it at slumber parties like a stag film, just for the “Catholic High School Girls in Trouble” segment — a parody trailer for a fake sexploitation film presented by the equally fictional “Samuel L. Bronkowitz,” starring more topless actresses than any of us had ever seen in one film before, including (I realize now) the very, very real Swedish soft-core star Uschi Digard, from Russ Meyer’s repertory company.

I wonder how often people tell John Landis how important “Catholic High School Girls in Trouble” was to them, and if he feels weird about shaking their hands.

Netflix, with its rows upon rows of instantly available titles tailored to its algorithmically generated idea of your taste preferences, is a far, far better thing, for sure. But Blockbuster sucked in a way that put the ball in your court. My point is, you were required, in the bland and uncurated confines of a Blockbuster, to create your own narrative, your own canon. Or you were free to.

Filed Under: Movies, Netflix, Obituary

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