The Vital $30 Billion Lesson Every Brand Can Learn from Netflix’s Rise and Blockbuster’s Demise 

This is a story of two companies and their brands: one a dismal failure and one a remarkable success and the lesson we can use right now for our own growth.

The year was 1997, when Blockbuster was already the undisputed champion in the video rental space, when a startup named Netflix launched.

From 1985 and 1992, the brick-and-mortar Blockbuster chain grew from one location in Texas to more than 2,800 locations around the world.

Responding to Cultural Shifts

Other than shifting from VHS to DVDs, Blockbuster never responded to cultural shifts and stuck with their retail model and renting or selling DVDs.

Blockbuster's mind-numbing timeline:

• 1985:        1 store
• 1990:    1,200 stores
• 2000:    7,700 stores
• 2010:    6,500 stores
• 2021:        1 store

Today, just one Blockbuster remains: a holdout in Bend, Oregon.

Netflix: From Mail Delivery to Entertainment Media Company

Netflix started out as a DVD rental-by-mail service.

They didn’t make the mistake of "believing in their model" but instead understood the actual business they were in: entertainment.

That single insight gave them room to pivot. (This one mistake of choosing the wrong thing to be married to kills more businesses than a room full of politicians).

Facts you need to know:

• It took Netflix over 16 years to reach its first 50 million users.
• It then took less than 5 years to climb from 50 million to 150 million users
• In 2012, Netflix has zero Emmy Nominations.
• In 2019, they had 117 Emmy nominations.
• In the second quarter of 2019, Netflix’s revenue was $4.9 billion
• HBO’s was $1.7 billion (compared to 2014, when second-quarter revenue for Netflix was $1.3 billion and HBO’s was $1.4 billion) just proving a lot can happen in 5 years.
• In 2019, Netflix invested $15 billion in original content and programming.

This is a Lesson in Brand Clarity Every Business Can Implement

Over a 20-year period, Netflix stock increased +56,954%

Netflix’s current valuation is $300.68 billion with shares around $654.06            

That total equals all these company’s valuations combined:

• Sony
• CBS
• Viacom       
• Discovery     
• Fox Corp
• AMC Networks
• DISH Network

The Lesson: Don't be married to your solution. Instead, be married to your customer's problem, aspiration, challenge, or goal.

What Made the Difference Between Bankruptcy vs. Unstoppable Growth?

Blockbuster was incorrectly married to their solution resulting in divorce (in business, that means bankruptcy).

Netflix was married to the solution their customers were seeking. That's made for a wonderful marriage (in business, that means success).

Have an amazing, safe, and healthy Thanksgiving. May any "food coma" resulting from turkey and caloric overload be brief and pleasant.

Would love to know your thoughts.

Like this? Follow me for more.

I help entrepreneurs, CEOs, and business leaders exceed industry averages and rise above the noise. Want to know more? Let's schedule a discovery call.

The Inevitable Third-person Profile of Yours Truly

Bestselling author of #1 Amazon bestseller, Brand Intervention, and Google’s #1-ranked rebranding expert, my four decades of expertise have generated in excess of $4 billion in sales, transforming not only how brands are seen, but how they sell, how they negotiate, and how they lead and inspire their culture.

I’m honored to have received over 320 international awards including the rare honor of being presented the Presidential Ambassador for Global Entrepreneurship medallion.

I help CEOs guide their companies to the proven path for the future by carving out the dialog that impacts hearts and minds and opens eyes. 

Need help? Let's talk.