How We Got Here with Chris Kohler Blockbuster blew $8 billion. We’re still paying for it
May 4, 2026
A corporate rise-and-fall story about rapid expansion, debt, and bad bets. The VCR, studio pricing, and DVDs reshaped home viewing and created the rental market. Blockbuster’s late fee addiction, aggressive growth, and missed Netflix buyout set the stage for streaming. The tale closes with the last store in Bend and how this collapse helped normalize subscriptions.
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How The VCR Survived Legal Attack
- The VCR legal fight culminated in the 1984 Supreme Court siding with consumers, largely influenced by public testimony like Fred Rogers', allowing VCRs to survive.
- That ruling enabled mass VCR adoption and birthed the home video and rental industries.
Studios Tried To Kill Home Video And Ended Up Funding It
- Studios initially priced VHS at prohibitively high retail prices (~$100) to suppress the market, unintentionally catalyzing a rental industry.
- Chris Kohler shows that studios' anti-VCR stance turned into a lucrative home-video revenue stream once they embraced lower prices.
Why Video Rentals Needed Late Fees
- High VHS buy prices forced rental economics: a tape had to be rented ~22 times at $3 to break even when tapes cost ~$65.
- That dynamic explains short one-night new-release rentals, heavy reliance on turnover, and the business logic behind late fees.