updated 09:05 am EDT, Tue April 7, 2009
Blockbuster may Exit
Blockbuster yesterday submitted a US Securities and Exchange Commission filing that reveals the company doesn't believe it can continue business. The video store is no longer certain that it can remain a "going concern" and may have to stop operations and close its doors if its financial situation doesn't improve in the near future. The warning comes in spite of a $250 million refinancing loan having been put in place just last week; Blockbuster now says there is "no assurance" that it can meet the requirements of the transaction before it's completed on May 11th.
The company doesn't directly blame its troubles on any one factor but has long been victim of the push by direct-order rental services, particularly Netflix's DVD rental queues. It has also been hit to a smaller degree by purely online services such as Netflix's Internet streaming as well as Apple TV and VUDU Box rentals. A poor US economy has also likely contributed to Blockbuster's poor state.
The retailer has struggled to get a foothold in the digital era without much success, including the pairing of its CinemaNow video rentals with media hubs from TiVo and 2Wire. At one point, Blockbuster had considered implementing kiosks that would have let users put movies directly on iPods and other portable media players.