On the afternoon of January 21, 2007, Netflix CEO and cofounder Reed Hastings was alone in his Park City, Utah home. Netflix was, at the time, known as an online DVD rental company — customers would visit the website, place their orders for DVDs, and have the DVDs shipped in the mail to them. In order to get their next rentals, customers would then have to ship their previously loaned DVDs back to the company. This was a win-win — Netflix had no physical presence, and customers paid only a monthly subscription fee for access to the entire library.
The business was bifurcated, with independently owned and operated stores on one hand and chains like Blockbuster on the other. The chains were typically ‘family friendly,’ which means they didn’t rent or sell pornography. The independent shops typically rented and sometimes sold pornography out of an access controlled area at a premium, and used that revenue to subsidize other rentals
I double dipped Netflix and Blockbuster rentals by mail when Blockbuster was competing directly with Netflix and both services were cheap, but I can count on one hand the number of times I walked into a chain video store, because I always lived near an independent store that was cheaper. (The surviving video store that’s ~12 km from me is about on par per rental in nominal terms today with Blockbuster at its lowest pricing)
The U.S. chains are all gone now. But with respect to surviving disruptive shifts, Family Video is worth a look. They were privately held, like Dick Portillo they owned the real estate underneath their stores, and they transitioned into a commercial property management company when the pandemic motivated them to close in 2021 due to minimal foot traffic and the absence of new product as a consequence of the shutdown of film production