Blockbuster

1985-2010

Blockbuster was a chain of home movie and video game rental shops. In 2004, it was an enormous company with over 9,000 stores. A primary source of Blockbuster’s profits came from punishing customers with fines for returning films late. A small competitor started a DVD-by-mail service in 1997, with the ad campaign »The end of late fees.« With subscriptions instead of renting videos, the annoying late fees became unnecessary. Customers could keep a video for as long as they wanted then return it to get a new one. Blockbuster briefly invested in digital, but didn’t continue because it threatened their profits. That little start-up that was initially ignored now has more than 81 million subscribers. Netflix killed Blockbuster. Radical disruption made Blockbuster’s business model obsolete. 

Additional info:
Wikipedia – decent sized article
Businessinsider – good article and lots of photos, but annoying ads…
Fastcompany – story of the rise and fall of Blockbuster