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the foreseen death of the video store industry is happening sooner than I had anticipated. hollywood video is closing all of their stores as well.
Link Here.
Honestly, this makes me happy. Blockbuster is a freakin' rip-off.NEW YORK — Shares of Blockbuster Inc. sank 30 percent Wednesday after the video rental chain warned that it may have to file for Chapter 11 bankruptcy protection.
Compe ion from DVD-by-mail company Netflix Inc. and DVD vending machines operated by Coinstar Inc. have eroded the Dallas company's revenue even as it staggers under a heavy debt load.
Blockbuster Inc. said in a regulatory filing late Tuesday that it was suffering "significant liquidity constraints," and could have to file for bankruptcy protection if it was unable to convince creditors to restructure a big chunk of its debt or its business continued to deteriorate.
The company has had to close about 1,300 stores and wants to shut down hundreds more. It had about 5,200 stores worldwide in January, excluding franchised shops. About 3,500 of those were in the U.S.
"The increasingly compe ive industry conditions under which we operate has negatively impacted our results of operations and cash flows and may continue to in the future. These factors raise substantial doubt about our ability to continue as a going concern," Blockbuster said in a regulatory filing late Tuesday.
The company is trying to update its business, setting up video rental kiosks like those run by Coinstar and offering a DVD-mailing service. It added 2,000 kiosks in 2009 and expects to have more than 10,000 by the middle of this year — but NCR Corp., which operates the kiosks, is "under no obligation" to install or run them, Blockbuster said.
Blockbuster is also pursuing several measures to help shore up cash. It wants to sell some of its international business and it is pursuing a debt-for-equity swap to help alleviate its debt burden. It wants to swap all or part of its senior subordinated notes for common stock.
It said it owed $975 million under senior secured notes and senior subordinated notes as of Jan. 3.
Even if the swap goes through, it could significantly dilute current shareholders.
Meanwhile, the company predicts further declines in its sales. The chain said it expects a key sales measure to drop in the mid-single digits to high single digits in 2010 — and a "further deterioration" could leave it unable to service its debt, leading to default.
The Dallas company's key sales measure sank 16 percent in the fourth quarter — a dismal holiday season performance despite higher advertising. It lost $435 million compared to a loss of $360 million in the last three months of 2008.
Shares fell 12 cents, or 30 percent, to 28 cents in afternoon trading Wednesday. Earlier shares fell to 25 cents, their lowest point in more than a year. They have traded as high as $1.56 in the past 12 months.
Copyright 2010 The Associated Press
the foreseen death of the video store industry is happening sooner than I had anticipated. hollywood video is closing all of their stores as well.
Doesn't surprise me at all. Thanks to things like Netflix, RedBox, iTunes, and (moreso) online piracy, the days of people renting videos are quickly coming to an end.
I used to go to Blockbuster all the time. Now it's been about 4 years since I last rented a video from them.
They had their fun. Free market at work. Something better, cheaper, more innovative comes along then it's time to retool or just wither away. Such a silly silly concept, but hey. It works. But seriously.........I saw them going out of business about 2 years ago. I wonder if these guys are too big to fail.
Even with Netflix on Xbox Live and PSN, I still like using their Reward? program. $30/mo for unlimited movies and games..... limited blurays, but I usually only rent the new releases they have anyway. I'm too impatient to use mail order Netflix or Gamefly and I'd go bankrupt myself if I paid per movie via On Demand.
I like the spontaneity aspect of Blockbuster. When we get the urge of wanting to rent a movie and stay in, we can just drive up the road and get a video. I have never done NetFlix, because I dont plan ahead to watch movies.
I think it is sad that so many retail stores are falling by the wayside because of online shopping replacing on site shopping.
I know the jobs are not high paying jobs, but they are still there for local people to work, and online companies do not benefit the local economy one iota.
Cronica de una Muerte Anunciada, for those of you out there who are bilingual . . .
I hear what you're saying but
This makes me happy.
A few years ago, I was running errands and went to return the Blockbuster video tape I had rented. It slid under the seat of my car, and was forgotten about in the rush to get everything else done.
Some time later, I get a notice from a COLLECTION AGENCY regarding this tape. It was the first notice at all I had gotten from the store regarding the tape. No polite call, no little postcard, nothing right up until the collection agency notice.
Blockbuster.
yeah, you save a dollar, but in the long run, when jobs keep disappearing because the local economy keeps dipping and dipping because every retail outlet is closed, we will be in for a rude awakening. It is sad, IMO. People that live in other countries and states are getting your retail dollars more and more and we never see a dime of it coming back
i wonder when newspapers and libraries will follow suit
Time to go dvd shopping at the rental places since they will be trying to clear out inventory and so will discount a lot of it.
Listen, All Dogs Go To Heaven is a popular movie, mmkay?
very true!
i smell a bail out coming from the man
A new video store called Family Video opened up by our neighborhood and it's awesome. Has a by-the-day rental structure, lots of $1 rentals (some rent-2 for $1 shelves), FREE kids' movie rentals (no strings attached) and really good used DVDs for sale.
I hope they make it, but I don't know how they're making money. Still, I've been going there once a week, because I still like picking out a movie for the night by looking through shelves and shelves of DVDs.
Blockbuster's business model was becoming obsolete, but they sped up their demise with their prices.
The blockbuster by my work closed a few months ago. We went 4 or 5 times just to watch the prices and there was nothing worth it at all. The "clearance" prices were 10% off retail (which is jacked up to begin with)... it was a typical liquidation deal where very little was priced well at all. Even the days right before closing, horribly crappy video games were priced at $35, $40, blu-rays were $20ish and dvd's were $10ish.
That said, if you can make it to a blockbuster or somewhere before they are officially "closing", then you can find the big discounts. Just make it before the liquidators take over.
Those were crummy "deals". I would not have bought anything either.
I'm not sure, but I think Hollywood Video beat them to bankruptcy, so maybe they will be OK.
When the Blockbuster by us was closing, they basically became a feeder store for all of the stores in the area to send their crappy DVDs they couldn't sell. Terrible selection, terrible "deals."
So much fail. Good riddance.
Between Netflix and pay-per-view, it's been easily 5 yrs since I have physically left my house to rent a movie.
I'll miss the Blockbuster online program if they go out of business. The ability to have movies mailed to me AND trade them in at the store is a perfect mix, as I too like picking a movie after searching the shelves. I'll move to Netflix if this happens, but I won't be particularly happy about it.
I was ok with Blockbuster because their online set-up was pretty sweet. Get a DVD in the mail, take it back to your nearby store when you're done with it, get a free rental. But when their in-store selection weakened, horrible online availability, the long waits for mail deliveries, the price increase, plus the rule changes on in-store returns, they pissed me off enough to where I canceled the online service AND my in store account. Went with Netflix and I've never looked back. I almost never have availability issues, the mailing time is fast (usually 2 days), the price is better (about $15 bucks cheaper per month) and their instant list is good.
I have no need for a video store or RedBox. I never HAVE to see any movie/show immediately.
If you like ty movies.
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