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Blockbuster may shutter in face of online threat

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.

 
Previous Comments

Hopefully....

04/07, 10:21am reply

they'll have time to distribute executive bonuses and hold a "Last Annual" all expenses paid employee beach party in Hawaii before they turn out the lights.

psdenno

Fresh-Faced Recruit

Joined: May 2003

+8

Hopefully....

04/07, 10:24am reply

they'll have time to distribute executive bonuses and hold a "Last Annual" all expenses paid employee beach party in Hawaii before they turn out the lights.

psdenno

Fresh-Faced Recruit

Joined: May 2003

-3

s**** 'em

04/07, 10:32am reply

hahahaha good riddance Ballbuster Video, just like Wall Street and the music industry you pursued a short-term strategy which investors loved in the short term (s******* video renters with predatory late fees) instead of pursuing long-term initiatives to head off the coming death of the bricks-and-mortar video rental store.

Ballbuster's attempts to compete with Netflix utterly failed. I remember getting enticed to join Blockbuster's DVD-by-mail service... epic fail. And why didn't Ballbuster pursue video kiosks like Redbox?

Over and over again Ballbuster demonstrated that they knew there was no future for their stores yet they could not pursue alternative distribution models in a timely or competent fashion.

climacs

Fresh-Faced Recruit

Joined: Sep 2001

+4

at one time

04/07, 10:34am reply

one-third of Ballbuster's income came from late fees.

That's a lot of bad will out there among former Ballbuster customers. I know I got tired of getting screwed by them and I became a Netflix customer in part to s**** Ballbuster back. Even when Ballbuster was offering really good deals for their DVD by mail service (coupons for free rentals at their stores), I preferred Netflix because they weren't Ballbuster and offered MUCH better service.

climacs

Fresh-Faced Recruit

Joined: Sep 2001

+5

one thing though...

04/07, 10:37am reply

when traveling in Europe I see a fair number of Blockbuster stores in major cities. I wonder how that part of their business is doing. Are Europeans deserting Blockbuster too? I don't think there is a Netflix equivalent in Europe, partly because the mail service there is a lot less reliable and partly because Europeans in general are not as web-centric as Americans are.

Or perhaps they don't have that many stores abroad to make up for their failing US business.

climacs

Fresh-Faced Recruit

Joined: Sep 2001

+1

Blockbuster is better

04/07, 11:22am reply

I'ts much better that Netflix. You can actually bring the envelopes to the store and get free movies back. If you exceed the 5 free allotments for that 3 movies program, you can rent the movies at a discount. I believe its 1.99. You get more movies free than Netflix.

slapppy

Fresh-Faced Recruit

Joined: Mar 2008

-5

Locally Already Gone

04/07, 12:46pm reply

Last time I used Blockbuster was when they tried to lure Netflix customers in by giving free rentals if you brought in the address page from your Netflix envelope. They did it twice and I actually have a stack of pages saved just in case they were dumb enough to try a 3rd time.

A few months ago I noticed the local store was empty. I asked when that happened at the store next door. They said a few days ago they just backed up a truck and emptied it out. Was nice of them to move in and run several nice Mom and Pop video stores out of business and then close shop. When my favorite shop closed is when I joined Netflix.

Jeb

JebNY

Fresh-Faced Recruit

Joined: Dec 2008

+3

yay!

04/07, 01:00pm reply

No BlockBusters = More Apple TVs

BelugaShark

Fresh-Faced Recruit

Joined: Aug 2007

+2

Let them die...

04/07, 01:04pm reply

...a well deserve death for s******* all their customers over the years. It's pay up time!

boazh

Fresh-Faced Recruit

Joined: Jul 2004

+5

Movie Stop is selling

04/07, 01:27pm reply

I was at a Movie Stop in Alabama yesterday and they were selling some DVDs from Blockbuster on their 50% off table. I guess I know where JebNY disks are going...

jdonahoe

Fresh-Faced Recruit

Joined: Jul 2006

+1

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