The Last Blockbuster: how the video rental giant went from 9000 stores to just 1

The last Blockbuster Video is in a mountain town in central Oregon

Today's expression: At its peak
Explore more: Lesson #355
April 15, 2021:

In the early 2000s, Blockbuster Video was a thriving business. It had 9000 locations in 14 countries around the world. But their dominance in the video rental market did not last forever. Today, just one store remains, and it’s in a mountain town in central Oregon. Plus, learn “at its peak.”

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There is one last Blockbuster video

Lesson summary

Hi there, it’s Jeff, and welcome to yet another Plain English lesson. This time it’s number 355, so JR has posted the full lesson at PlainEnglish.com/355.

Coming up today: There was one in my town growing up. There was one, not in JR’s home town, but in Xalapa, where JR went to school. There was one in thousands and thousands of towns and cities around the world. I’m talking about a Blockbuster Video store, and now there is just one remaining. We have an expression, “at its peak” and JR has a song of the week.

One last Blockbuster video remains

They were everywhere: Bright blue signs, yellow lettering, uniformed employees, snacks by the checkout, a unique smell, a drop-off bin, and rows and rows of videocassettes—later DVD’s—for rent. I’m talking about Blockbuster Video, the biggest video rental chain, which at its peak had over 9,000 stores in 14 countries.

Today, there is one. There is one open and operating surviving Blockbuster Video. It is in a city called Bend, a college town in the northwestern American state of Oregon. The last remaining Blockbuster Video is independently owned by a franchisee, who continues to license the name and brand from Dish Networks, which acquired Blockbuster years ago.

The Blockbuster story dates back to the early days of home video. When Sony released its first home video cassette player, consumers could, for once , watch movies at home, on their own time and schedule. Movie studios were happy to sell copies of their movies on VHS cassette…for a hundred dollars. From their standpoint, a home movie represented a lost ticket at the theater, so they priced videos extremely high. And so some enterprising entrepreneurs decided they would buy all the latest movies and just rent them out by the night. And just like that, the video rental business was born.

Movie studios later came around, reducing the price of their VHS cassettes. But it didn’t matter: consumers were hooked on the convenience and selection of video rental. At the beginning, the industry was dominated by local or small regional chains. There was always a problem, though: the local video store never seemed to have enough copies of the latest movies.

Blockbuster’s main innovation was to buy lots and lots of copies of the latest movies, so customers could always find the latest hits. They then sold their spare copies to their customers at a discount once the initial excitement faded. Using their scale and their franchise model, Blockbuster bought up regional chains and came to dominate the video rental industry.

Video rental served as a community hub and a traditional activity for Friday nights, holidays, and sick days. For anyone born between, say, 1975 and 1995, Blockbuster was part of the social fabric of childhood and adolescence. Blockbuster stores also provided an enviable employment opportunity for teenagers the world over: it sure beat working at a grocery store.

But Blockbuster’s dominance did not last forever. Legend has it—and this is according to stories told by Reid Hastings—legend has it that Netflix founders approached Blockbuster and offered to sell Blockbuster their company. They offered to sell Netflix to Blockbuster for just $50 million in 2000, again, according to legend. But, according to legend, they were laughed out of the room . Netflix, we all know, came to dominate at-home consumption of movies, first by sending DVD’s by mail and now through its streaming platform.

Blockbuster didn’t go quietly. Many people don’t remember this now, but Blockbuster created a multi-platform business, where customers could stream videos online, rent them from kiosks, or go to one of its stores. Blockbuster by Mail was the same as Netflix in the early days. The problem was that Blockbuster was saddled with debt. When Netflix made $1 in profit, they could reinvest that dollar in improving the product and the experience. When Blockbuster made $1, however, they had to use that dollar to pay down debt. Corporate debt can be good for companies in stable industries. But Blockbuster was being disrupted: it couldn’t afford to innovate and service its debt at the same time. In the end, Netflix won big.

Blockbuster had a franchise model. That means the company owned a number of stores, but the remaining stores were owned by local business owners who paid a franchise fee for the right to use the name and the brand. Most stores closed from lack of business. Dish Networks, a satellite TV provider, acquired Blockbuster out of bankruptcy in 2011. Just a few years later in 2014, they realized there was no future in this business and they closed the remaining 300 company stores.

But not every franchisee went out of business. For years, three stores hung on in Alaska. They were featured on an episode of John Oliver Tonight and became something of a media curiosity. They eventually closed in 2018. The last holdout in Australia closed in 2019, leaving just one location.

That one remaining store in Bend, Oregon, is owned by a local business owner. The store continues to license the Blockbuster brand from Dish Networks, which graciously continues to extend the relationship. They still use the same ancient computer systems: they have to, since nobody is updating video rental software anymore. The manager’s name is Sandi: she says she’s going down with the ship. She’ll never quit as long as Blockbuster stays open. She’s done hundreds of media interviews.

Today, people visit from around the world. They can’t believe one still exists. They enjoy the smell, they browse the stacks, they listen to the sound of DVD’s sliding into the return bin, they pull their old Blockbuster cards from way back in their wallets.

New documentary on (you guessed it) Netflix

If you liked this story, then check out a new documentary called “The Last Blockbuster.” That documentary is streaming—where else?—on Netflix.

The documentary brings back good memories. Every Blockbuster VHS tape had the same case. It was a hard black plastic case with a plain white label and black text on it, identifying the title. The plastic on the spine was always peeling: they mentioned that in the documentary. They had interviews with the staff at the Bend, Oregon, store, plus interviews with executives from Blockbuster. The majority of the screen time was celebrities and entertainment industry people talking about their experiences and memories of Blockbuster. It was fun. If you have Netflix, check it out. It’s called “The Last Blockbuster.”

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Expression: At its peak