Blockbuster made several critical strategic mistakes that accelerated its downfall. One of the most notable was its decision to reject a partnership offer from Netflix in the early 2000s. Netflix proposed a collaboration that could have helped Blockbuster transition into the digital age, but Blockbuster dismissed the idea. Furthermore, Blockbuster's focus on late fees as a significant revenue stream alienated customers, while Netflix's subscription-based model with no late fees gained popularity.