Fun fact: The “Blockbuster” reason behind Netflix’s success

In 1997, 36-year-old Reed Hastings founded Netflix out of frustration—Blockbuster had charged him an obscene $40 fee for returning his Apollo 13 DVD late. At his company, subscribers could order DVDs online (no more than three a month), get them in the mail, and keep them for as long as they like without any late fees.

With rentals fueled by personalized recommendations—something Blockbuster couldn’t do for its massive user base—Netflix carved a space for itself. But soon, competition from behemoths like Walmart replicating its model at lower prices surfaced as a threat.

In 2000, Hastings gave Blockbuster the offer to buy his video-rental company for $50 million but the bigger video-rental company laughed it off. Today, Netflix is a $140 billion company, while Blockbuster is trying to claw its way out of the grave.

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