Kevin: September 2000, the twenty seventh floor of the Renaissance Tower in downtown Dallas, Texas. The conference room is enormous, with a 30 foot table made from some endangered hardwood that has hidden power outlets and audio plugs built into its surface, and then a window behind it looking out across the city. Three men in t shirts and flip flops are sitting at one end of that table. They flew in this morning on a private jet they couldn't afford. Claim that by total coincidence normally belongs to Vanna White from Wheel of Fortune. The man in the middle is Reed Hastings. He's 39 years old. He's the co-founder and CEO of a tiny startup called Netflix that lets people order DVDs by mail, and his company is on track to lose $57 million this year. His co-founder, Mark Randolph, and his chief financial officer Barry McCarthy are sitting next to him. And the three of them have spent the last several months trying to set foot in this exact conference room. That's because the company that owns the room, the table, and the floor they're sitting on is called Blockbuster. And Blockbuster in the fall of 2000 is the most powerful video rental chain on earth. 9,000 stores around the world, 60,000 employees, and $6 billion per year in revenue. The CEO of Blockbuster arrives a few minutes later. His name is John Antioco, and his loafers by Randolph's later account probably cost more than Randolph's car. Hastings makes the pitch he flew across the country to make. Combine forces, Blockbuster keeps the stores, Netflix runs the internet side, and the whole package comes with a price tag of $50 million. Antioko listens politely, nods at the right moments, and then asks, how much? When Hastings tells him, Randolph spots the corner of Antioch's mouth twitch upward just for a second. In a way he would later write was the moment he realized that the man across the table was struggling not to laugh. The deal dies in the room, and the Netflix guys ride back to the airport in silence. Two years later, Netflix goes public with about 600,000 subscribers and a market value of $300 million. By 2010, Blockbuster has filed for bankruptcy. Today, Netflix is worth around $400 billion, and the only blockbuster store left in America is a tourist attraction in Bend, Oregon. That's what really happened. But what if Antiochou doesn't laugh? What if he writes the check? Let's hit Ctrl-Z and rewrite history. Welcome to Control Z Rewritten, the podcast where we take the biggest decisions in history and ask: what if they go the other way? Not random what-ifs, real 50-50 calls with real alternatives that were actually on the table. One decision, we hit control Z, try it the other way, and see what changes. John Antioco was the son of a Brooklyn milkman. And by the time he sat across from Hastings in that conference room, he had spent his entire career becoming exactly the kind of man you'd expect to laugh at a $50 million offer from a startup. He started out at 20 years old in 1970 as a management trainee at the parent company of 7 Eleven, and he spent the next two decades climbing the ladder there before moving on to run a glasses chain, a bankrupt convenience store called Circle K, and then Taco Bell. By 1997, Antioko had a reputation as the guy you called when your big retail brand was dying and you needed somebody to come in, stop the bleeding, and save the patient. That was the year Blockbuster came knocking. When he took over, the company was hemorrhaging cash. Cash flow had fallen by 70% in a single quarter, partly because Blockbuster's previous management had decided that what a video rental chain really needed was a sideline in clothing and a separate music store division. Antioko killed both. And then he sat down with the Hollywood Studios and made them an offer that broke the entire video rental business model in half. Until that point, the studios had charged about $65 for a single VHS tape, which meant any video store had to rent a new release 30 times before turning a profit on it. Antioco's offer was simple. Blockbuster pays $1 per tape up front, and then we split the rental revenue with you. The studio said yes, and within two years, Blockbuster had so many copies of every new release on its shelves that no other rental chain could compete on selection. The company's market share jumped from 25% to over 40%. Antioco was a hero. There was, however, a small problem with the empire he'd just saved. By the late 1990s, the most lucrative revenue stream Blockbuster had was the late fee. The chain pulled in eight hundred million dollars a year that way, which was about fifteen percent of its entire annual income. That meant the most profitable customer Blockbuster had was the one who came back late, owed money, and was furious about it. A whole generation of grown adults associated the blue and yellow sign with the specific feeling of getting ambushed by a forty dollar bill for forgetting to return Apollo 13. One of those grown adults was Reed Hastings. He was a Boston kid who'd done a Peace Course stint teaching high school math in Swaziland in the mid-80s before going to Stanford for a master's degree in computer science. By his mid-30s, he'd co-founded a software company called Pure Software, walked it through a sale that closed in 1997 at around seven million dollars, and pocketed enough money to spend a year or two thinking about what he actually wanted to do with his life. What he wanted to do, as it turned out, Was get even with Blockbuster. The founding myth Hastings liked to tell at dinner parties was that he got hit with a $40 Blockbuster late fee for running Apollo 13 and got mad enough to start a competing business out of spite. If you remember, there was a season of curb your enthusiasm where Larry David started a spite business. This is the original. His co-founder Randolph has since admitted that the Apollo 13 origin story is mostly fiction. A tidy after-the-fact invention cooked up to make the company easy to describe at cocktail hour. The underlying truth is real though. Everyone hated Blockbuster's late fees, including a couple of engineers in Silicon Valley who were starting to figure out how to build something better. What they built was Netflix, which by September 2000 had 300,000 customers, 100 employees, and was bleeding cash fast enough that the founders had been trying for months. Find someone, anyone, willing to buy them. Two years earlier, they had actually turned down an acquisition offer from Jeff Bezos at Amazon for somewhere between $14 and $16 million. It was on the theory that Netflix could grow into something much bigger. Now, they were standing in a conference room in Dallas making the same offer to a different giant, and the price had gone up to 50 million. The Netflix team had spent months trying to set up that meeting. Then, late one evening in early September, the three of them were at the company's first ever corporate retreat in rural California when McCarthy got a phone call. Antioch wanted to meet the next morning at eleven thirty in Dallas. It was already late evening on the West Coast and commercial flights wouldn't get them there in time. McCarthy thought the whole idea was crazy because the trip would cost twenty thousand dollars on a chartered jet they couldn't afford. And Hastings shut down the argument with a single line. We're on track to lose at least $50 million this year. Whether we pull this off or not, another $20,000 won't make a difference. So they chartered the Vanna White jet. The next morning, they walked into a building Randolph would later describe as an unbroken cube of steel and glass. They took an elevator to the 27th floor, and they were ushered into a conference room with a 30-foot table. Antioco came in completely relaxed. The Netflix guys and their t-shirts and flip-flops were not. Hastings ran through the pitch. The world was going online. Customers were gonna insist on transacting through the internet, whether anyone in the rental industry was ready or not, and Netflix had spent three years building exactly the operation Blockbuster needed to step into that future. The deal was simple. Combine forces with Blockbuster keeping the stores and Hastings team running the internet side, one company with two channels, and a clean shot at the next decade of home entertainment. Then Antioko's general counsel, a man named Ed Steed, cut to the question that mattered. If we were to buy you, what were you thinking? I mean, a number. What are we talking about here? Hastings said the number, and Randolph caught the twitch at the corner of Antiochos' mouth. The meeting unraveled fast after that. Stead made a long argument about how online businesses weren't sustainable. Antiochos said the line that would follow him for the rest of his career, the dot com hysteria, is completely overblown. The Netflix team flew home crestfallen, and on the plane back, Randolph said the only thing left to do was kick Blockbuster's ass. That's what really happened. There's a version of this story where Antioco doesn't laugh. There's a version where he looks at the small scrappy team across the table and recognizes the same opportunity he'd seen with the studios two years earlier: the chance to lock down a market by paying upfront for an asset before everybody else realizes it's valuable. There's a version where he nods slowly, glances at Steve, and says, Let's talk. In that version, the deal closes by Halloween of 2000. Hastings becomes senior vice president of online at Blockbuster, reporting directly to Antioch, while Randolph hangs around for a year or so before drifting off to other projects, and Barry McCarthy stays on as the chief financial officer of the new digital division. And the next 26 years of American business look nothing like the ones we ended up with. Hastings spends his first 18 months at Blockbuster picking one fight after another. And the biggest one is over the late fees that bring in $800 million a year. He argues every chance he gets that the late fee is a tax on Blockbuster's most loyal users, that it's the entire reason Netflix exists in the first place, and that any rental chain still charging it five years from now is going to lose anyone who isn't. Antioko eventually came around to that argument in real history, though it took him another five years to get there. He killed late fees on January 1st, 2005. By which point Blockbuster had run out of the cash cushion needed to absorb a $250 million hit to its operating income. With Hastings inside the building from day one, the same call lands in roughly 2002, when the cushion is still intact and the new subscription business is building underneath it. There's another fight Hastings can't see coming, and it's the one that in real history eventually broke the company. In 2000, Blockbuster wasn't an independent business at all. The chain belonged to a much larger media conglomerate called Viacom, which also owned MTV, Nickelodeon, and Paramount Pictures. And the CEO of that conglomerate was a billionaire named Sumner Redstone, who by 2003 was getting tired of owning a video rental chain. Redstone spun Blockbuster off in 2004. The deal worked out great for Viacom and terribly for Blockbuster. Because on his way out the door, Redstone forced the chain to take out a billion dollars in new debt and hand most of that cash directly to its parents. Blockbuster then spent the next six years bleeding interest payments to banks while trying to compete with a much smaller rival that had no debt at all. That rival was Netflix. The same spinoff still happens in 2004 in our alternate. Except now Redstone is selling off a company that owns the most popular online subscription service in America, with 3 million subscribers and growing at about 50% a year or so, which means the valuation is high enough that he can take his money in stock instead of forcing a debt finance dividend. Blockbuster spins off with cash on its balance sheet instead of a billion dollars in interest payments to make. Total access, I don't know if any of you remember that. The program that lets online subscribers swap their mail order DVDs for new ones at any physical store launches in 2003 instead of 2006, three years earlier than the actual rollout. By the end of 2004, Blockbuster.com has 4 million subscribers, a number Netflix wouldn't hit until early 2006 in the world we actually ended up with. Then comes streaming. Netflix launched its streaming service called Watch Now in January 2007 with a thousand titles available on day one and a brand new product category that Hastings spent the next decade building into a global business. With him inside Blockbuster from 2000, the same product can ship two years sooner. The licensing deals come faster and cheaper than they ever could for a startup because the company already has revenue sharing relationships with every major Hollywood studio. Thanks to Antioch's old contracts, and Blockbuster Watch Now launches in January of 2005. There's a parallel story unfolding at Netflix at the same time. An engineer named Anthony Wood spent 2007 working there on a top-secret internal project codenamed Griffin. The whole idea was a small black box that you would plug into the back of a TV and let you stream movies straight to the couch with no computer required. The team built it. The demos worked, and the launch was scheduled for the spring of 2008. A few weeks before the box was supposed to ship, Hastings killed it. He realized that putting his own branded device on the market would make every other major TV manufacturer refuse to install Netflix on their products. So Hastings spun the project out as a separate company, kept a 15% stake, and let Wood run it independently. The company that came out of that decision was called Roku. and you almost certainly own one of its products or have one built into your TV right now. In our alternate, the box ships under Blockbuster's logo. There's no conflict over branding because there's no Netflix, and Wood stays at Blockbuster, ships the player in 2007, and the same gadget goes on to dominate the streaming hardware market under a different name. Meanwhile, the major TV networks are panicking. NBC and Fox launched a defensive joint venture in two thousand seven called Hulu, which was their attempt to control the future of video on the internet before Netflix and YouTube ate their lunch. In our alternate, the threat the networks are worried about is the company that owns both the largest streaming service in America and 9,000 stores in every American city of any size. They build Hulu anyways. In 2010, John Antioco retires as the most successful turnaround executive of his generation, and Reed Hastings takes over as CEO of Blockbuster. Three years later, on February 1st, 2013, the company releases an original political drama starring Kevin Spacey and directed by David Fincher. The show is called House of Cards. The data Hastings is sitting on, billions of hours of viewer behavior across millions of subscribers. Told him that the same people who liked political thrillers also tended to like Spacey's earlier movies and Fincher's other films, and that overlap was big enough to justify a $100 million bet on two seasons. The bet pays off, and Stranger Things follows in 2016, Squid Game in 2021, and Wednesday in 2022. The same original slate that turned Netflix into a $400 billion company turns Blockbuster into one in our version. Blockbuster had taken a swing at this once before. In 1994, six years before Antioch even arrived at the company, the chain opened a 60,000 square foot entertainment complex in Albuquerque, New Mexico, called the Block Party. It had laser tag, mazes, and motion simulator rides. The press at the time described it as a miniature Disneyland on steroids. It died within a couple of years because nobody wanted to drive across town to play laser tag at a video rental brand. In 1994, the blue and yellow sign meant renting Apollo 13 on a Friday night, and Blockbuster didn't own anything anyone loved enough to drive across town for. But that's no longer true in our alternate 2017. By that point, Blockbuster owns Stranger Things and House of Cards and Orange is the new black. And the early seasons of every series Netflix would eventually release in our world. The company also still owns 4,000 high traffic retail leases in nearly every major American city because Hastings smartly started closing the worst stores in 2008 to fund the streaming build out while keeping the best ones. Somewhere around 2015, somebody inside the company looks at the lease portfolio and the early returns from House of Cards at the same time and realizes. Blockbuster is sitting on something nobody else in entertainment can build. The first Blockbuster experience opens in Burbank, California in the spring of 2017, eight years before Netflix would actually open a permanent physical entertainment venue in the world we ended up with. It's a former flagship store, gutted, redesigned, and reopened as a fully immersive Stranger Things attraction that takes about 90 minutes to walk through. The parking lot is full on a Tuesday afternoon. The line out the door of teenagers in costume, parents with kids who've never lived in a world without streaming, and the actual cast of the show showing up for the opening week to sign autographs. The interior is a recreation of the secret government lab from the show, with flickering fluorescent lights, peeling concrete walls, and a glassed-in sensory deprivation tank visitors can sit inside while a sound designer pipes in audio from the season one finale. The exit dumps you into a nineteen eighties diner that serves egos with bacon and a Coca-Cola in a glass bottle. And the gift shop sells t-shirts, posters, and a five-foot-tall demogorgon you can buy for $999 and have shipped to your house. It works. By 2019, 50 of the highest legacy stores have been converted into stop. By 2019, 50 of the highest traffic legacy stores have been converted into permanent. IP anchored entertainment venues. And the smaller 4,000 locations get rotating themed pop-ups every three months tied to whatever show is hottest at the moment. There's a Wednesday-themed haunted house in October, a Bridgerton tea service every spring, and a Squid Game Survival Challenge somewhere in the country pretty much continuously. By 2026, Blockbuster operates 400 permanent experiential locations and another 3,000 pop-up storefronts, all attached to the streaming service. And the kid in Cleveland who just finished binging Stranger Things on a Saturday morning can drive 40 minutes that afternoon and walk through it. Right now, in 2026, Netflix is doing something similar. The company opened its first permanent physical entertainment venue at a mall in suburban Philadelphia called King of Prussia in November 2025. They opened a second one in December at a Dallas shopping center called the Galleria, and then a third is planned for the Las Vegas strip in 2027. Each location takes up about a hundred thousand square feet of former department store anchor space. The actual experiences inside are a Stranger Things Escape Room, a Squid Game Survival Challenge, a Wednesday photo set, and a restaurant called Netflix Bites that opened in Las Vegas last year. Netflix is leasing all of this space from outside landlords, paying market rent on commercial property at a moment when American real estate is one of the worst asset classes in the country, and learning the in-person retail business that Blockbuster spent thirty years figuring out. And our alternate, all of that was finished in twenty seventeen. The story everyone tells about Blockbuster is that the company didn't see the future coming. The story is wrong. John Antioco saw it. He launched Blockbuster's online subscription business in 2004. He killed late fees in 2005, even though they were generating $800 million a year. And he rolled out the total access program in 2006 that let mail order subscribers swap their DVDs for new ones at any physical store. Which was a feature Netflix could never match because the company didn't have any retail locations. By the first quarter of 2007, Blockbuster's online business was growing faster than Netflix's, and Reed Hastings was losing subscribers for the first time in his company's history. But then, Antiochos own board fired him. A billionaire investor named Carl Icon had bought roughly 10% of Blockbuster in 2005, joined the board, and And spent the next two years arguing that Antioca was overpaid, the new investments were costing too much, and the company should give up on the online business and focus on getting people back into stores. Icon made his fortune buying chunks of struggling companies and using his board seats to push out the people running them. And by March of 2007, after a fight over Antioch's bonus, he won. Antioco's replacement was a man named Jim Keys, the former CEO of 7-Eleven. Who in 2008 told an interviewer that neither Netflix nor Redbox was on his radar as a competitive threat. Two years later, Blockbuster filed for bankruptcy. The decision that killed it actually came in March of 2007. In December 2025, Netflix opened that 100,000 square foot entertainment venue at the Galleria Dallas, north of the office tower where John Antioco told Reed Hastings that the dot com hysteria was overblown. Across town, at the corner of Skillman Street and Northwest Highway, the strip mall where the original Blockbuster opened in October of 1985 is still standing. It's just no longer yellow and blue. Netflix is rebuilding in the worst commercial real estate market in a generation what Blockbuster owned and then gave back. The streaming wars are over. The next war is about who can take a TV show and And turn it into a place people drive to and pay for. And Netflix is winning that one too. And that's wild, because the company that turned Hastings down in September 2000 spent 30 years building exactly the asset Netflix is now reconstructing from scratch. The decision Antioco made in that conference room didn't just hand Hastings the streaming business, it eventually handed him the real estate. The experiential venues, the merchandise, the food and beverage, and every other revenue stream attached to the entire global Stranger Things audience. A bill for one rejected meeting kept compounding for 26 years. And it's still arriving in the mail. Decisions don't get do-overs, but on this show they do. If you like the show, please rate and subscribe wherever you happen to be listening. It helps other people find the show, and it helps me figure out whether people actually enjoy it. Until next time, I'm Kevin Perez Allen. Thank you for hitting Ctrl Z with.