IN THE BELLY OF BLOCKBUSTER: Interview with former VP of Development for Blockbuster Video Mike Beck
Interview with Mike Beck by Josh Schafer, Dec 1 2025, Raleigh, NC.
Blockbuster Video is arguably the most divisive cultural icon of the 90s. For some, it’s the beacon of premium nostalgia, a literal sign of the times that offered countless movie nights at home, making memories of glory days gone by. To others, the blue and gold ripped ticket represents an evil corporate giant, censoring content, and stomping out the small town Mom and Pop shops that created the foundation for the video rental era.
This is the classic example of both things being true. They are the nostalgic staple for the video store era, and they did put a ton of indie video stores out of business. But there are intricacies that happened behind the scenes, in the belly of the beast that is Blockbuster. Facts that help contextualize and crystallize the broader scope of Blockbuster Video, that could only be noted from the inside.
I met Mike Beck randomly at a hot dog and beer joint in Raleigh, NC, and after some casual conversation, I learned he was once the Vice President of Development for Blockbuster in its most prolific era (1988-1994). I knew his experience and voice could help shine a brighter light on the history of Blockbuster, and give us a peek behind the bruised blue and gold legacy.
JS: How and when did you start working with Blockbuster? What was your role in creating the stores?
MB: Initially, I worked for a Blockbuster franchisee in the Southeastern US. We quickly opened a little over 200 stores as franchisees. I was responsible for new store real estate and construction, video tape procurement, and marketing for that franchise group. That group was Blockbuster’s largest franchisee.
When the parent company–Blockbuster Entertainment–had about 1300 stores, it acquired our franchise group and our 200 stores. At that point the owner of our franchise group became the President of the parent company, and the management team that had run our franchise group took on managerial roles at the parent. I became the VP of Development for Blockbuster Entertainment, where I remained until we sold the company to Viacom in 1994.
I was in my twenties–only a year out of business school. I had been doing site selection and land acquisition for a regional multifamily developer headquartered in Raleigh.
I did not personally yet own a VCR. Many of us did not. But we saw the performance of these six-thousand square-foot, well-lighted, stores with 10 to 15 thousand titles. We found the economics compelling. And we were all in.
My introduction to the Blockbuster management team was through a college classmate of mine who was working for Wachovia. He had been calling on Blockbuster unsuccessfully. But he was a fan of the people and the business.
You told me an amusing fact about the location of the first Blockbuster in Dallas, TX. Can you relate that to your readers?
I think I told you that the first Blockbuster opened in 1985 in the Medallion Shopping Center in Dallas, in 1985. That is true.
I also told you that subsequent to the Blockbuster opening, American folk rock legend David Crosby was arrested on a weapons charge in the Medallion Shopping Center parking lot. That is mostly true. He, in fact, was arrested three years before the first Blockbuster opened.
I saw Crosby play years later, by himself, on campus at Duke. He told the audience the Medallion Shopping Center arrest–and the resulting prison stay–was a turning point on his road to sobriety.
Blockbuster is seen as the enemy by many in modern day, mainly for killing off the bulk of Mom and Pop shops. Did you experience the chagrin and sometimes hatred from the local video stores as you moved in?
We knew we were variously respected and despised by other video operators. When we were considering a new location, we would walk in to the existing video stores near the targeted location and count the number of new releases on their shelves. That would give us some idea of the depth of the demand for video rentals.
More than a few times mom or pop in their own store would recognize what we were doing and “ask” us to leave. Sometimes with red-faced profanity.
We never felt great about that.
Many smaller regional operators did quite well when Blockbuster came to town. West Coast Video (oddly, a Philly-based company), Shows-to-Go (Saint Louis), Erol’s Video Club (Mid-Atlantic), and others accepted buy-out offers in the form of Blockbuster stock. As the stock appreciated over the next several years, those companies did better than they would have operating video stores.
Other operators did well not selling to Blockbuster. Movie Gallery, Video Warehouse, Video Update, and others come to mind.
Still others simply closed when they could not compete on depth or breadth of title selection.
Do you have any stories of local video stores doing something wild or crazy to try and stop the Blockbuster from coming to town? Like sabotage or anything like that?
The least warm welcome we received was when we first sought to open a store in the Bronx. I don’t have any specific knowledge, but it was alleged that the Mom and Pop video stores in that area were connected with an organization who liked cash businesses.
When our first store was a few days from opening, it tragically caught fire and burned down to nothing. Blockbuster filed an insurance claim, collected, rebuilt the store, and again, tragically, days before opening, the store burned to the ground.
In some cities, San Francisco was one example, the local operators would use political connections to City Hall to block Blockbuster plans approvals. This approach was effective.
How did you choose the places to set up Blockbuster stores? What were the criteria, and what did that process look like?
One aspect of the site selection decision was existing video rental demand, which I touched on earlier.
Another thing we tried to measure was the extent to which the primary demand for video rentals would expand with the opening of a newer, larger store with greater depth and breadth of titles.
But the most important aspect of the site selection decision had to do with consumer behavior. Specifically, we were interested in what customers were doing when they were apt to rent a video (2.3 videos on average, actually).
For instance, we learned that the decision to rent a movie was typically made at home, as opposed to on the way home from work or school. Or, as opposed to while shopping or otherwise being entertained. And we learned that it was typically a family decision. So the most frequent occasion for a video-rental decision was at home, after dinner.
This meant we wanted to be near residential density.
We also learned that we needed locations that were familiar and easy to bring to mind when the decision to rent was made. The most familiar trade areas were the trade areas with significant amounts of square footage dedicated to daily needs retail.
This meant we wanted to be prominently located in areas with what we called ‘retail gravity’.
Further, we had to consider that renting a video required not just one trip to the store, but two. So we looked for retail traffic generators that were conducive to frequent customer trips. Grocery stores, drug stores, banks, dry cleaners, liquor stores.
A regional mall would have immense retail gravity. But none of it would be conducive to a weekly occasion that would require two trips. So a regional trade area was not a great video location.
What was your experience like making these stores? Did you attend openings and things like that?
Blockbuster’s new store opening operation was labor-intense, systematic, process-driven and machine-like.
Our real estate department was set up in six regional offices–Atlanta, NYC, Toronto, Dallas, Chicago, and LA. Each office was led by a director-level manager and a team comprised of 5-7 real estate managers, a lease administrator, and an asset manager. The construction department was set up similarly.
Additionally, we had 4 in-house real estate attorneys who managed dozens of lawyers in 6-7 outside firms.
Also, we had an in-house real estate research department comprised of 7-10 GIS-trained analysts with access to the latest in demographic and traffic data.
Our real estate group also managed a 240,000 square foot warehouse in Dallas where we received surplus VHS tapes from our stores and from other sources weekly. From that massive warehouse inventory of tapes we would compile the basic stock inventories (what we called ‘BSI’) for new stores. This process resulted in a significant savings in the cost of a new store because most of each store’s starting inventory we already owned.
I travelled constantly to try to at least see each site we had under consideration.
All-in-all, we had about 100 employees, and a larger number of outside brokers, general contractors, lawyers, architects and engineers; dedicated to opening 550 to 650 new stores a year.
What was Blockbuster like, on the inside? How was your experience working for them?
The corporate culture was positive. Fun. We had our own awards show eventually. The Blockbuster Awards. And for two years we had a college football bowl game. The Blockbuster Bowl. All of that stuff was fun.
The business attracted a lot of movie guys. People who loved movies. But for the most part the company was focused on the business. Most of us were focused on creating shareholder value. And we did.
Wayne Huizenga bought between 15 and 20 stores from David Cook, Blockbuster’s founder, in 1987 for less than $20 million. In 1994, only seven years later, we sold 4500 video stores to Viacom for $8.1 billion.
That was quite a run.
What’s something you want people to know about Blockbuster in their heyday? Your observations and / or something that would surprise people, maybe?
Blockbuster’s growth was aided by the fact that we were a public company who could raise money by issuing shares. Blockbuster during its heyday was opening more stores each year than most other video companies ever had or ever would have.
At the time we sold the company, Blockbuster’s annual cash flow exceeded $1 billion. We had no problem funding our growth.
But because of the threat of what we called then ‘video on demand’--what we now know as ‘streaming’--Wall Street could not get behind another video rental IPO. So we never really had a second place threat to our dominance.
But when Blockbuster sold for billions, Wall Street changed its tune. In the year after we sold the company, there were three video IPO’s. Competition began to threaten the Blockbuster business for the first time.
But Blockbuster kept building stores. The store count eventually reached 9100 stores.
But because of new and better competition, and because of evolving technology, Blockbuster per store valuation was never greater than it was when we sold in 1994.
I’m sure you’ve read the story about that time when Blockbuster could have bought Netflix for $50 million. Reading that leaves one with the idea that Blockbuster would have Netflix’ valuation today if it had just taken the deal.
While this whole story took place years after I had left Blockbuster, I do not arrive at the same conclusion.
At the time the $50million Netflix deal was available to Blockbuster, Netflix was a video disc mailing service–not the streaming juggernaut it has been for the last two decades.
And at that same time, Viacom had hired a CEO from Seven-Eleven to run Blockbuster. Many Blockbuster executives during that time had cut their teeth in the convenience store business. They were experts in store operations. Afterall, Blockbuster was a store operations business.
Netflix’ executives were then–and are now–some of the most creative, ballsyist entrepreneurs in the world.
Had Blockbuster paid Netflix’ $50 million for their disc-mail-order-and-return business, the Seven-Eleven management team would have set out to run the mail order business as efficiently as possible–while it lasted. And the Netflix’ founders would have gladly taken the $50 million and invested in a streaming business.
And both companies today would look about like they look today.
What did your departure from Blockbuster look like? What caused it?
I left the company with most of the executive officers in 1994 when we sold the company to Viacom. We went on to launch many new ventures together over the past 30 years.
Huge thanks to Mike for taking the time to relay his epic journey with Blockbuster. The info he's provided is crucial when considering the entire breadth of the company, and further informs and shapes the most accurate account of what Blockbuster did to and for the video era. After reading this, has it affected your view of Blockbuster? It just might. Like Mike said, what an incredible ride.