Monday, December 13, 2010

Blockbuster (BBI) Had the Chance to Buy Netflix (NFLX) But Dismissed It?

A Variety article about Blockbuster from 2005 quotes,

a former high-ranking Blockbuster exec, who recalls, "We had the option to buy Netflix for $50 million and we didn't do it. They were losing money. They came around a few times."

Instead, in 2000, Blockbuster inked a 20-year exclusive video-on-demand pact with Enron as the energy conglom launched into telecom. Blockbuster canned the pact after nine months.

Netflix is now worth $1.4 billion. Blockbuster's market cap is about $850 million.
And now, Netflix is worth $10 billion and Blockbuster is worth ~$100 million. Ouch!

I understand that Sumner Redstone paid $8.4 billion for Blockbuster back in 2004.

Meanwhile, the television and movie studios are looking for ways to "contain" Netflix.

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