Backroad Odyssey : Travel, Van Life & Lost Locations
Traveling America's backroads, history and road trip enthusiasts - Noah and Noodles - unearth fascinating locations overlooked while traveling.
Living out of a van, they research and visit each story location to share the (often shocking) secrets held within.
If you love travel, history and thoughtful storytelling - join us on the road!
Backroad Odyssey : Travel, Van Life & Lost Locations
The Last Blockbuster - The Little Video Store That Could
One solitary Blockbuster Video location remains ...
The story of this lonesome Blockbuster provides a lens into the larger rise and fall of an American icon.
Noodles and I visit Bend, Oregon to unpack the truly fascinating story of The Worlds Last Blockbuster.
Works Cited:
https://www.jstor.org/stable/41948252?searchText=blockbuster+video&searchUri=%2Faction%2FdoBasicSearch%3FQuery%3Dblockbuster%2Bvideo%26utm_source%3Dgoogle%26so%3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default%3A2e2181c12e0dcbf0453e4916fb6bb497
https://www.jstor.org/stable/24411692?searchText=blockbuster%20video&searchUri=%2Faction%2FdoBasicSearch%3FQuery%3Dblockbuster%2Bvideo%26utm_source%3Dgoogle%26so%3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default%3A0ee9160783ad78079a9ef9af1e980484
https://www.thestreet.com/technology/history-of-netflix-15091518
https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to/
https://www.imdb.com/title/tt8704802/
https://www.businessinsider.com/rise-and-fall-of-blockbuster
https://thebolditalic.com/so-i-visited-the-last-blockbuster-on-the-planet-and-all-i-got-was-this-t-shirt-ffc6d2ed414d
https://inspireip.com/blockbuster-failure-story/#:~:text=However%2C%20Blockbuster%20ignored%20customers'%20preferences,and%20ease%20in%20watching%20videos.
https://hbr.org/2011/04/how-i-did-it-blockbusters-former-ceo-on-sparring-with-an-activist-shareholder
https://www.the-independent.com/news/world/americas/the-last-blockbuster-netflix-oregon-b1817869.html
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Cruising down the street. I wonder where this road would lead so many possibilities. Care to share what you think. Oh, noodle Dolls, what do you see? Back Road Odyssey? Hues of vivid, blue and yellow surround you, the plastic perfume of countless VHSs and DVDs in the air. Action, comedy, drama these are the many genres littered throughout the maze of aisles in the store Twizzlers Oregon. We're heading back into town to make our grand pilgrimage to the last operating blockbuster in the world. Our grand pilgrimage to the last operating blockbuster in the world.
Speaker 1:Blockbuster, a one-time cultural staple, from Bend, oregon, to Fort Myers, florida, sydney, australia, england and beyond, now simply exists as a memory for so many people. And this would continue to be the case if not for where we're going right now. The story of this last solitary blockbuster in Bend is just as interesting as the broader story of this Titanic company's really slow decline. We'll explore both stories today, but for now you know the drill. Let's start simple. What made Blockbuster Blockbuster? Let's start simple. What made Blockbuster Blockbuster? How did the signature Blockbuster plastic card earn a spot in the wallets, in the purses, in the pockets of millions? Where else to start? But the beginning.
Speaker 1:The year is 1977. Hell yeah, oh yeah. With the seeds of American consumerism of the 80s largely already planted, the time is now ripe for new ideas and new technologies to enter the market. One such technology is the VHS to enter the market. One such technology is the VHS video home system now available across the states. From here on, movies can be sold directly to consumers, who can watch them in the comfort of their own home. That is for a price. Your typical new VHS release in the early 80s cost around $100. Not entirely practical or ideal. I've got to return some videotapes Patrick Bateman, american Psycho. Enter the video rental store business model which solves the problem of price Walk in, pick a movie, spend a few dollars, take it home, watch it, return it and you are done Easy.
Speaker 1:One such video rental store was opened by David Cook in the fall of 1985. The store's name Blockbuster Video in the fall of 1985. The store's name Blockbuster Video. Cook's family-friendly video rental establishment, to put it lightly, blows up Just three years later. New stores open and profits soar, and Blockbuster transcends a term describing a film's success. It becomes a destination at its peak. Blockbuster boasts 9,094 stores worldwide with an annual revenue of over $5 billion.
Speaker 1:How People forget there were other rental stores. Blockbuster did not invent it. What's the key to Blockbuster's unique success? If you want to view paradise, simply look around and view it. Willy Wonka and the Chocolate Factory, 1971.
Speaker 1:Let's start with this. Okay, so, where most video rental stores had limited copies, especially of new releases, blockbuster has everything all the time. And not only that, they stayed open longer. You had three-day rental periods rather than just a single day. Stores were family-friendly. There was no weird beaded door in the corner of the room. But, importantly, blockbuster also claimed a unique revenue share model with movie studios. Rather than having to pay full price for each really expensive VHS, later DVDs, blockbuster would dish out 40% of each rental to the studios. Let's say this so Blockbuster rents out 100 copies of Dead Poets Society in 1989 at $2 each. Blockbuster keeps $120. The studios keep $80. And this revenue share model means a uniquely cheaper supply of videos, which enables more copies of your newest releases and, finally, enables increased profits to Blockbuster stores.
Speaker 1:Perhaps the greatest key to Blockbuster's early success is this Streamlined and confidential technology. That is right. When we picture Blockbuster today, we think archaic, unadaptable, static. But from the start, blockbuster used and embraced new technology. From the start, blockbuster used and embraced new technology. They had a unique computer software system that made renting videos from any Blockbuster around the world faster. Checkouts were faster, information was more easily stored, age restrictions automated. It was simpler, it was more convenient than any mom and pop-pop video rental store in the world. And going off this, I'm going to make a controversial statement. You might want to sit down. Blockbuster Video was once the pinnacle of efficiency. We're parked outside the Blockbuster right now. It's pretty surreal. It's like going back in a time machine to sit here and to look at those bold, brick-like letters.
Speaker 1:I remember so vividly the thrill of being able to physically touch, physically search through all of these different movies, tv shows as a child. For me it was always kind of this bright spot in the series of family errands that we had to run. Right, we'd go to the grocery store, we'd go to Walmart, walgreens, and if we made a stop at Blockbuster it was all right with me because it was fun, it was an experience. And right here, right now, I feel like I'm in the back seat again with my siblings waiting to go in and rent. I don't know the Lion King Noodles. My dog wasn't even a glint in her grandparents' eye when this happened.
Speaker 1:But here's my question now From dinosaurs to to Zumba pants, to Vine, to Seinfeld, all these things, all things end. So how did Blockbuster right, with all its wealth, with all its influence, all its power, how did it meet its demise? Its demise? Family, religion, friendship these are the three demons you must slay if you wish to succeed in business, mr Burns.
Speaker 1:Season 8, episode 21 of the Simpsons, cook leaves the company in 1987 over disagreements with former waste management business mogul turned Blockbuster CEO, h Wayne Huizenga. What are these disagreements? Most simply put, cook wants less debt, which slows company growth. Huizenga wants to take on more debt, which stimulates growth. Under Huizenga, blockbuster's Napoleonic conquest of the video rental space truly begins. Blockbuster stops at nothing until you, your cousin and your mother's uncle lives within the proximity of a Blockbuster store. Need a new location? No problem, take on more debt with the banks, as long as you're physically growing. It looks good on paper. According to Zynga, in time it's estimated a new Blockbuster location opens every 17 hours. And here, right here, is where the seed of our friendly little Blockbuster that could in Bend, oregon, which still operates today, is planted to grow at the rate desired by Blockbuster Video.
Speaker 1:Blockbuster will franchise? Pretty simple really. Franchisee finds a piece of land he likes, gets a lease usually 20 years takes out a construction loan, throws up a building and off he goes. Ray Kroc, the founder 2016. It's worth exploring just what franchising is for a minute. A franchisee is a person or business that pays a fee to a franchisor Blockbuster in this case. This payment allows the franchisee to operate a business under the franchisor's brand and systems. Now for Blockbuster, this means the right to use their coveted standardized computer systems. Franchisees would also have the right to use products, brands, materials and trademarks for a set number of years.
Speaker 1:Agreements between franchisors and franchisees can be different from company to company. For Blockbuster in 1988, when Blockbusters were popping up like weeds, you paid an initial fee of $55,000 to operate under the Blockbuster name, then a quick $30,000 for proprietary software, a fee for maintenance and continued royalties and a bit more here and there. It was a lot by franchising standards, but it seems to have been worth it in those early years. Monthly revenue by 1989 was, on average, $65,491 per month per store. Let's not get bogged down by all of the numbers. All of this is to say there was a reason to start a store or convert a store under the Blockbuster name, expensive as it was, as we will soon see with the story of the last remaining Blockbuster.
Speaker 1:To continue, we need to understand the following fact there is a small but critical difference, especially with Blockbuster Video, between company-owned stores and stores owned and operated by a franchisee For Blockbuster. On average, early on, about half stores were company-owned, meaning the company was financially responsible for that store, and about half were franchised. Its fate tied roughly to the franchisees. I'll just chime in quick for those interested To operate at a one to one ratio half company owned, half franchised is a wild thing. Remember to open up all of these company stores. Half franchised is a wild thing. Remember to open up all of these company stores. The accumulation of debt was all but necessary. You sleep yet, trust me, I majored in cinema, arts and science.
Speaker 1:At no point in your rambling and coherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points and may God have mercy on your soul, the Principal, billy Madison. And may God have mercy on your soul, the Principal, billy Madison. We've never been better. Over 9,000 stores 5.9 billion in revenue, 80,000 employees and counting. Investors of Blockbuster Video must have boasted this statement aloud during the summer of 2004. Surely, as they were saying this, they would not have also mentioned that currently the company is also $1 billion in debt.
Speaker 1:Four years prior, in 2000, a small DVD mail-to-home startup called Netflix approaches the titanic business entity with an offer For 50 million dollars buy us and we'll run your online operations. The founder of this company, of Netflix, reed Hastings, is laughed out of the room. In retrospect, it's easy to see how foolish this was, but why say no Before you say anything? It was not the debt. They had in their possession over $100 million in ready cash to spend on whatever they wanted from a recent IP deal. Let's go back in time. The year is 2000. Go back in time, the year is 2000.
Speaker 1:Netflix ships DVDs directly to your house and charges no late fees. Why go to a physical location when you can receive the movies you want from home? Simple, easy, convenient Blockbuster Video boasts thousands of physical locations, but doesn't ship DVDs to your house and charges late fees. Which would you choose? Like me, you must be wondering why, blockbuster? Must you continue down your crumbling road? There are so? So many reasons. Let's start with this. Blockbuster depends upon its late fees. 16% of its profits come from them. Also, large companies are often slow For Blockbuster, for example, its shareholders and leaders are reluctant to pivot in any way, especially to invest in untested methods of making money.
Speaker 1:It had worked for so long for Blockbuster, why change? One example of this is Carl Icken, an activist investor, later Blockbuster CEO. He was opposed to the idea of turning the company online. Ceo, he was opposed to the idea of turning the company online. He was adamant that the time-tested business model of brick-and-mortar stores would be more successful. In other words, he wanted to stick with a business model that was turning out more and more to not really be efficient, not really work at, not for much longer. Then, the nail in the coffin. When Netflix launches its streaming service in 2007, with superior software, flexibility and limited debt, it was by then much too late to pivot or to catch up. The elephant cannot catch the cheetah. Change is inevitable, except from a vending machine. Ferris Bueller's Day Off, 1986. I'll ask again why did Blockbuster fail? Here's the SparkNotes version.
Speaker 1:They had an inability to pivot quickly Once it paved the way for new technology and it was small enough to pivot when it needed to After 2004,. Even beforehand, if we're being honest, they were simply too big, too outdated, riddled with debt and too beholden to shareholders to change. They had an outdated business model, it turns out. Paying for brick and mortar buildings customers no longer were willing to travel to, and selling products that people increasingly didn't need or want from those buildings wasn't exactly a recipe for success Outside competition in a changing industry. So actually buying DVDs became more popular as companies like Walmart, best Buy, target and others sold DVDs, really at a loss to get people through the door. They also, as we've kind of talked about, undervalued younger, quicker, more streamlined upstarts like Netflix and Redbox. They had bad, or, let's say, delusional, leadership much of the time. Carl Ecken, especially his insistence of not doing much of anything, wasn't great, and shareholders and a general feeling of hubrisness filled the rank and file. We're big enough that we can't fail.
Speaker 1:Finally, what made Blockbuster Blockbuster in the first place? It's debt. When the 2008 financial crisis hit, companies not built exclusively on debt struggled, but tended to survive. More often, blue and yellow stores down the street built on really a house of cards, a treasure trove of debt, essentially couldn't carry on. I declare bankruptcy. Michael Scott, the Office Blockbuster Video declares bankruptcy in 2010. Many hoped this would be a time to reset and rethink what Blockbuster is and could be, but it's fate, it seems, was already written in stone. One year later, dish Networks buys the remaining company-owned stores, along with Naming Rights. The final corporate-owned Blockbuster store closes in 2014. The remaining franchise stores fight on bravely renewing naming rights with the new owner, dish Network, until slowly, one by one, they vanish, becoming memory.
Speaker 1:I'm in the blockbuster now. I feel a bit strange recording. There are people all around. I'll make this brief. Then we'll go out and we'll talk all about it. So just describe what I see quick the old technology, the old computers, all of the aisles with the different genres. You know the snacks. I've always thought it was weird that they had a pickle on the way out. I don't know if anybody else noticed that. It's so fun being here, but I've got a question. Okay, blockbuster once had over 9,000 locations, all relatively standardized, all looking more or less like where I'm at right now, and many of them franchised, just like this store and in similar towns.
Speaker 1:How did this small blockbuster store in Bend, oregon, survive when so many did not? What's different about this store. I didn't hear no bell. Rocky Balboa, rocky V the year is 1991. How did this one store survive?
Speaker 1:Well, first off, you have to have a community willing to come by and rent movies, which Bend seems to have in droves. You have to have devoted management willing to put in the work and make connections with people that come to your store, which in a lot of ways is derived from the family business aspect of what was once Pacific Video. That ma and pop store mentality seems to have survived throughout the years. And, in my view, maybe most importantly, as these blockbusters start to close, you become a lot more relevant, right when there's 20 left, when there's 10 left, when there were just two left and then they became the last blockbuster. There's a lot of power in being the last of anything. Rarity in this case, becomes your greatest asset. Many of the store in Ben's current revenue comes from simply selling blockbuster merchandise inside the store, not to mention another key to their continued success is the millions of dollars in free advertising. Anyone that goes to the last Blockbuster is not going to pass up an opportunity to take a picture of the last Blockbuster, as long as their licensing agreement with the current owner of Blockbuster's name, dish Networks, keeps being renewed. The last Blockbuster will continue to survive. What is dead may never die Theon Greyjoy. Game of Thrones, season 2, episode 3.
Speaker 1:I'm back in my van, got a cool new Blockbuster hat. Noodles couldn't join, sadly. I'm sure she would have loved to, but that was cool. It felt like a comforting hug from the 90s. I didn't rent any movies For many reasons. I don't have a DVD player in my van and I'm not from or around Ben Oregon all that much. From a lot of the research that I've done, it seems like people still come and rent videos, which is awesome, which is awesome. My guess is you'd have to be a local. But it's comforting in a weird way to know that this archaic practice is still around somewhere, if not nearby me, and I think that's what's so special about this location.
Speaker 1:It's not just a museum, not solely a nostalgic merchandise store. It's a living and it's a breathing blockbuster, something that, when looking back at the roller coaster story from one store to thousands and then one again, is, in my view, reason enough to stop and to enter the last blockbuster here in Bend Oregon. What, if anything, can we learn from the blockbuster story? To never get too comfortable. Change is important. I don't know, sitting here in 2024, 39 years after its founding, 20 years since its peak and 14 years after the company declares bankruptcy, I don't know if there is, or even can be, an answer. Blockbuster was and continues to mean so many things to so many people, either in memory or thanks to a small, family-owned store in Bend, oregon. In person. It's Noah here.
Speaker 1:Thank you genuinely for listening to Backroad Odyssey. My dog Noodles, and I appreciate it. So Bend, oregon, is one of my favorite towns to visit, even if it didn't have the last blockbuster. Would I recommend you going to Bend just to go visit the last blockbuster? Probably not. Probably not.
Speaker 1:But I'll say this if you're in Bend, if you're an outdoorsy type or if you just enjoy the town in itself, to be there and to not go to the last blockbuster is a missed opportunity, because it really is now, with no blockbusters left, a unique experience. It feels surreal walking through those aisles and there's great merchandise. I got a cool hat out of the experience. So, regardless, I hope you enjoyed this episode. I hope you enjoy Backroad Odyssey If you appreciate all of the work and research that goes into each episode. Taking a minute to write a review of the show really, really helps us continue to put the work that we'd like to into each episode and do the research that we also. Would like to Really appreciate your continued support of the show. With that said, be good to each other. We're two next.
