Blockbuster was known for charging customers a fee for every day they were late returning a movie rental. In fact, Blockbuster said it made $800 million in late fees, or 16% of its revenue. This frustrated many customers, including Netflix founder Reed Hastings.
Hastings said he founded Netflix because he did not want to pay the $40 fine he acquired at Blockbuster. In its early stages, Hastings' company, which had no late fees, would send DVDs straight to your house for a flat monthly rate.