When Blockbuster Tried to Beat Netflix To the Streaming Punch

With the announcement of a new Pokemon Snap today, fans immediately took to social media to remember the halcyon days of Blockbuster Video, the once-mighty home entertainment empire that crumbled with the advent of streaming video on demand. For a lot of people, Blockbuster was a staple of their childhood and its loss -- even though a lot of people complained about the company when it was in business -- is a bittersweet one. A great many people remember video stores more generally and Blockbuster in specific as a kind of safe haven of their youth, and mourn their loss in the post-Netflix world.

And while it is true that the company famously turned down an opportunity to purchase Netflix at what would later be seen as a bargain price, it is not true that Blockbuster was completely oblivious to the impact that technology and the internet would likely have on the video rental market. In fact, in 2000, they developed a streaming video on demand model in cooperation with a partner company that would have been way ahead of its time and might have kept Blockbuster as the biggest voice in home entertainment -- if not for the long term, at least for a little while longer.

The problem? Their development partner was Enron, and shortly after their relationship fell apart in March 2001, the Blockbuster deal was one of a number of Enron endeavors that company executives had internally overvalued as part of a sweeping financial scandal that would bring the company down and begin an economic slump that would soon after be exacerbated by the terror attacks of September 11, 2001.

There are details about the project -- and how it fell apart -- in From Betamax to Blockbuster, a book about the rise and decline of the video rental industry. You can also find a demonstration that someone uploaded to YouTube (it's embedded at the top of this story). It was uploaded to YouTube by Scott Gregory in support of the book Securing the Network: F. Scott Yeager and the Rise of the Commercial Internet.

After the failure of the Blockbuster broadband rentals, the company tried a number of things to remain relevant in the post-Netflix landscape. It added a "moviepass," which allowed customers to pay a flat rate for unlimited (one or two at a time) rentals in-store. They got rid of late fees, and instead only charged customers extra if they kept the movie for long enough that it automatically sold to their account. They even did a Redbox-style vending strategy, Blockbuster Online which blended delivery through the mail with in-store moviepass-style rentals, and (aftermost of the stores were out of business) a tabletop VOD scheme.