Blockbuster Reportedly on the Verge of Bankruptcy
Blockbuster Reportedly on the Verge of Bankruptcy
Posted 08/13/2010 at 6:08am
| by Paul Lilly
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Blockbuster earlier this week announced that it would begin offering videogames as part of its DVD by mail subscription model, and there may be more at stake here than simply trying to gain some ground on Netflix.
According to news and rumor site Fudzilla, Blockbuster's financial situation is in shambles. It all started with the company being delisted by the New York Stock Exchange in early July, and since then, Blockbuster was able to get a forbearance agreement to delay a reported $42 million in interest payments, Fudzilla reports.
After all that, it seems Blockbuster will need even more extensions if it's to avoid filing for bankruptcy, though Creditors are reportedly pushing pretty hard for the rental chain to go through with a Chapter 7 filing.
The cold reality is that Blockbuster might simply be running out of both time and options. To date, the company has made a number of moves to try and adapt and remain competitive, including cheap kiosk rentals, introducing videogames to its DVD by mail business, and signing an agreement with Warner Brothers to receive movies a full four weeks before Netflix.
Image Credit: seekingalpha.com
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razorpetti37
August 17, 2010 at 4:46am
As much as I am a big Netflix fan (5 years and counting), I'm actually sad to the see the B&M Blockbusters dissapear. There are two reasons for this.
First, I'm a bit nastalgic when I think of Blockbuster. When I was growing up as a kid, I always looked forward to the nights when my brothers and I would beg my mom to rent some movies and she would cave in and stop by Blockbuster on the way home. I loved walking through the aisles and always spending a lot of time browsing the new release walls. Granted, if a new movie was very popular, all of the copies were out of stock, but try renting a new popular movie on Netflix. I had Inglorius Bastards at the top of my queue for almost 2 months before it showed up. I think visiting a store to rent a movie adds a little pizazz to the whole experience, making it one step closer to visiting a movie theater to see a movie. Yes, Netflix and other forms of "media to your home" are convienent and quick, but do we really want a society that hibernates in thier homes? Without delving into that topic, I bring up my other point.
What happens to the older folks, the occasional renter, and the last minute movie grab? These people don't want a Netflix subscription, they don't rent movies very often. For the longest time they've been able to just stop by the neighborhood video store (often Blockbuster) and grab a movie when the time calls for it. Don't try to make a case for Redbox, they are great for new releases, but I've got a feeling older folks often want to rent older movies. Redbox could possibly satisfy the "last minute movie grab" person, but with such a limited selection, its like ordering pay per view on cable TV, theres only a few you might actually want to watch.
There is one upside to this whole Blockbuster debacle. The local family video store may revive itself. Years of getting the corporate "box out" from the home video market may be coming to an end, allowing more local chains to start doing business and still offering the B&M store I previously ranted about.
So, while my nastalgia is tied to the local Blockbuster store, maybe it wouldn't be so bad if the new generation's movie renting memories are tied to "Family Video" or "Indie Videos". Same experience, different name.
Nevermore26
August 16, 2010 at 1:27pm
I used to manage one location of a small local video chain in the mid '90s, and BB opened stores across the street from all 5 of our locations. We offered better prices, better hours and a deeper selection, but couldn't compete with the quantity of new releases they would get. Within 2 years, 2 of our stores were closed, & after Hollywood Video opened locations within blocks of our 3 remaining stores, well, business didn't exactly pick up. We did have a short renaissance when DVD came out, & we embraced the format before they even dipped a toe into that market. I think the 3 stores are still operating, but they are all owned by different people now. It was fun while it lasted. :)
doggz
August 15, 2010 at 4:02pm
Oh well, we still have an indie video store or two (or three) here in San Francisco, and they seem to drum up good business.
Talcum X
August 13, 2010 at 1:10pm
Your time has come and gone. You failed in customer satisfaction and the abilit to change with the digital times. Now go and be just a bad memory.
Blues22475
August 16, 2010 at 5:49am
The days when I was a kid and my mom would take me and my brother up to Blockbuster to rent games. Slowly, we started having the need to rent games anymore (when I started using my pc for gaming and discovered the world of MMO). Now it seems they are going down the drain just like alot of my childhood remembrances. On another note, another renting place called "Hollywood Video" went out of business here recently. They required first-time-renters to pay a down fee of 10 dollars per rental. At the time, that was ridiculous compared to Blockbuster (as Blockbuster didn't charge that kind of thing). But hearing stories in this article about how Blockbuster is going down the crapper I think Blockbuster now isn't the same one it was anymore.
JohnP
August 13, 2010 at 10:47am
1st, they drove all the small operators out of business, then jacked their prices and their return fees way up. The arrogance was beyond belief. Good riddance.
jgrimoldy
August 13, 2010 at 9:32am
How the hell did BB allow this to happen?
It's not as if Netflix came out of nowhere. I've had a Netflix membership since mid 2000. At that time, BB seemed reluctant to add a significant selection of DVDs to their shelves. Netflix was a nice alternative.
BB should have seen this coming and should have invested in the infrastructure to compete. They were once in a good position to have squashed Netflix. It's almost like when Xerox said that they were a copier company and didn't want to get into computers.
Now, they're a little to little, and a little too late. Good fucking riddance.
I tried a freebie BB-by-mail membership a few years ago. The discs took DAYS to arrive (compared to Netflix's overnight). This was a deal-breaker for me.
schwit
August 13, 2010 at 7:53am
If Netflix has no competition they will start acting like other monopolies. Prices will rise and service will suffer.
sniggler
August 13, 2010 at 7:37am
perhaps they should lower the prices on their rentals!
NO-ONE wants to rent a new release DVD for $7 anymore. Don't know how the prices are in the US but up here in canuck-land they're gouging us
lunchbox73
August 13, 2010 at 7:36am
Ah, how the mighty have fallen. Once king of the rental world BB enjoyed it's reign at the top a little too long. In the meantime other companies noticed a little thing called the world wide interwebs and they figured that little slice of technology might just change things a wee bit. Too little too late Block Buster.
JoetheMobster
August 13, 2010 at 7:35am
when it comes to renting movies, I'm still old fashioned in that I drive down to the movie place and pick some up. For me, Blockbuster is close by and they USED to get 99% of my business. When they went to their 'return it when ever you like' business model, I found it extremely frustrating trying to rent any new release - there was never a copy in. The next biggest place to rent movies here is Rogers, which is further but they have almost always had a copy in when I wanted one. I do not work for Rogers, they've just made me a happy move renting customer is all! Reason I mentioned all this is I've run into numerous others that feel the same way as I've commented. Maybe enough people have stopped going to Blockbuster for that reason?! I won't miss 'em that's for sure!
jgrimoldy
August 13, 2010 at 9:44am
I'll agree that brick & mortar stores have charm, much like book stores. Amazon is a great way to buy books (and every damn thing else), but nothing quite replaces browsing the aisles of books and walking out with book you want immediately, as well as other books that you discovered in the process.
So too, browsing the aisles of videos can be nice. In order to be competitive, it better be one BIG FUCKING video store with tons of esoteric and otherwise hard to get DVDs. For those in Seattle, I'm talking about something like Scarecrow Video.
RedBrain
August 13, 2010 at 6:52am
$42 Million in interest? Somebody forgot to rewind the tape when they returned it.
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