Netflix's co-founder says Blockbuster execs tried not to laugh when they pitched a $50 million partnership — it's now worth $149 billion

• Netflix's co-founder took to LinkedIn to share an awkward encounter with Blockbuster in the 2000s.
• Marc Randolph said the Blockbuster team tried not to laugh when Netflix pitched a $50 million partnership.

Netflix co-founder Marc Randolph – who exited the company in 2003 – took to LinkedIn to share an awkward encounter of pitching a $50 million partnership deal to entertainment rival Blockbuster in the early 2000s.

Randolph, who co-founded Netflix alongside Reed Hastings in 1997, opened up about the founders' early struggles to keep the company afloat and its brush with bankruptcy in a recent LinkedIn post.

Randolph said that in the beginning, the company was a "DVD-rental-by-mail" service and gained a growing customer base. After the dot-com crash and burning $50 million on costs, the founders decided to approach the "movie rental king" at the time – Blockbuster – about a potential partnership.

"The pitch was simple. We would join forces with Blockbuster. We would run the online business. They would run the stores. We would jointly develop a blended model," Randolph wrote, adding that the Blockbuster team was initially interested.

When asked about how much the deal would cost, Hastings proposed $50 million.

"There was perfect silence," Randolph wrote. "Their words were 'we'll consider it,' but we could tell they were fighting to suppress laughter. After that, the meeting went downhill fast."

Blockbuster's former CEO John Antioco has previously talked about the negotiations saying he saw Netflix as a "very small niche business," and decided not to buy the company.

Netflix launched its video streaming service in 2007. As of the end of 2022, it had amassed 230.75 million subscribers and currently has a market cap of $149 billion.

On Monday, it announced that it will end its DVD rental service in September this year.

Meanwhile, Blockbuster – which in its heyday had 9,000 stores and was a significant fixture in American life – filed for bankruptcy in 2010 before being bought by Dish Network in 2013.

Dish Network closed almost all of its stores in 2013. And today, all that remains of its legacy is one franchise location that is run under the "Blockbuster" banner but operated independently.