Has Blockbuster Finally Gone Bankrupt?
Filed under: Exhibition, Newsstand, Home Entertainment
It was a good run while it lasted, but it looks like the video retail chain Blockbuster is finally on its way to the big strip mall in the sky. Yahoo reports that the video chain is close to filing for bankruptcy after a disastrous year, which saw them losing over $500 million in 2009. The Texas-based company has been meeting with lawyers to discuss their options, and even went as far as to consult Pierpont Communications about how to break the news to the press, and more importantly the stockholders, that the retailer had, "issued a regulatory filing claiming it may need to seek federal bankruptcy protection if it cannot restructure its debt."So how bad could it be? Well, just take a look at Blockbuster's record over the past few years: they have closed hundreds of stores, sales have gone down by 20%, and profits are plummeting. The retailer made some attempts last year to get into the digital content game, but I think this is a case of too little too late, because revenue from their new kiosks, online rentals, and streaming video hasn't helped. Now compare that to a company like Netflix that has grown annually by 20 per cent and is posting profits of $679.7 million for 2009.
Blockbuster had revealed that it was in negotiations with Hollywood studios for better financial terms to provide their stores with DVDs when the bankruptcy story hit the wire. If Hollywood decides that Blockbuster is too much of a financial risk, it could force the already cash-strapped retailer to make up-front payments for their content, and with 'liquidity' being a real problem for the video retailer, it could be the last nail in the coffin. So far, the financial melt-down is focused in the US, and according to Blockbuster, Canadian and UK stores are just fine. But I can't be the only one who thinks it's just a matter of time before what started out as a joke has gotten one step closer to becoming reality.
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Reader Comments (Page 1 of 1)
3-19-2010 @ 7:00PM
Zach said...
Pity the employees. But good riddance.
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3-19-2010 @ 7:27PM
Jeff said...
Company will go BK. They will restructure the debt and no one outside WSJ and Financial Times readers will know the difference.
Move along nothing to see here but some debt holders losing money. Move along...
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3-20-2010 @ 1:47AM
YouFaceTheTick said...
Won't be missed. They drove out the good video shops in the 80s and 90s. Bastages.
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3-20-2010 @ 3:16AM
Alvie said...
Check you facts please...
1. Pier Point is Blockbusters Public Relations company, has been for some time now.
2. They lost less than 500 million, 429 million, not more.
3. Blockbusters On Demand service is over 100 devices, including Tivo, Samsung Blu ray and TVs and lots of other devices.
4. Netflix while it is doing great it has not gained 20% business every year.
Please read the actual 10K report and check your facts if your going to blog.
Reply
4-14-2010 @ 10:20AM
karen said...
Do you know if they are going to keep the online part going? I want to cancel netflix after reading about how we are going to have to wait 28 days for new releases.
3-25-2010 @ 8:06AM
g b said...
alvie, thats funny that you ask people to check there facts...really funny. You can have the $429 million dollar loss, i. e. keep investing in BBI, i'll take the $679 million dollar profit anyday. Heck, i dont even care that wb is backing blockbuster with month early releases. Netflix has contracts with microsoft (xbox) and sony (ps3), so where are the blockbuster contracts? 100's of devices? fyi, dvd's play in 100's of devices.
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4-24-2010 @ 11:36AM
Denis said...
Who cares about Blockbuster or Netflix when all of the cable companies are now offering gigantic libraries of on Demand movies for pennies. I have Verizon FIOS and majority of older movies are free to watch and the new releases are also pretty cheap $0.79-$3.99. I believe my movie library is something like close to 40,000 movies and programs with more being added regularly. Why go to a store, wait for the DVDs in the mail or even stream them on the Internet when all you have to do is press two buttons and any movie you desire is right there. Plus you don't need to worry about any late fees or any other charges. Digital cable with the ability to watch any movie in existence will be the future of movie and just overall television watching, and eventually everyone else will fail.
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