Blockbuster Collapses: Shutting Down 500 Stores In Desperate Bid To Save $200 Million

[OhioChick]

Source: Business Insider

Feb. 25, 2010, 3:42 PM

Blockbuster is losing big when it comes to at-home videos, so they are cutting back on expenses and on advertising in the U.S. to make up for it.

US same-store sales fell 15.9% in the 4Q and revenue dipped 18% to $1.08 billion compared to last year.

By closing its 500 weakest stores, the video-rental company hopes to reduce expenses by $200 million, the Financial Times reports.

Jim Keyes, chief executive officer, said the company was working with Rothschild, its financial advisors, on ways to increase its liquidity, including a possible recapitalisation.

Under Mr Keyes, Blockbuster is seeking to establish its brand in rapidly emerging new channels such as digital downloads and vending kiosks.

But they've already been beat to the punch. Netflix and Redbox dominate market share when it comes to digital downloads and vending kiosks, and Blockbuster will have a difficult time growing in those segments.


Read more: http://www.businessinsider.com/blockbuster-closes-500-stores-to-save-200-million-2010-2

[Thrill]

1. Not surprised

NetFlix and RedBox proved there is no need for a video store anymore.

[Cha]

68. First I've heard of Redbox but

I've been a netflixer for years. Love the Free Watch Insantly!

[hlthe2b]

2. Too little too late, for BB, I'm afraid...

They have suffered from very poor management for years.

[bluestateguy]

3. Better cash in your Rewards points quick

BB is going the way of the trading stamps you used to get at the supermarket.

[aquart]

20. Which I still get at D'Agostino's.

[damntexdem]

4. They're busting all their blocks.

And it's a shame, because there is a need for actual PLACES one can go for things, and help with things. But all of the computer retail stores have closed (as opposed to the "office" stores that often don't know what they're going with computers); and now it's happening with one more area.

[customerserviceguy]

14. Who needs help finding a movie?

when you have movie rating sites such as Rotten Tomatoes?

The only thing the rental store is good for is making sure you don't get a scratched up copy of a movie that will skip like crazy in all but the most expensive DVD players. The latter is the reason I quit Netflix years ago.

[subterranean]

21. I've been using Netflix for the last 2 years.

I've only had a problem with one or two DVDs skipping or freezing. And I certainly don't have the most expensive DVD player.

[customerserviceguy]

32. I guess it depends on what you get

I was finding with animated films, I'd routinely get scratched ones. I swear, some people must use them as Frisbees for the dog!

In any case, the idea of another minimum monthly bill is the reason I'd never go back to Netflix. Sometimes I feel like watching a few movies, sometimes I just don't.

[Liberal_in_LA]

37. did you try washing the DVD? Always works for me.

[WriteDown]

23. Convenience such as Netflix and Redbox will lead to further job loss unfortunately.

Not sure anything can be done though.

[MicaelS]

50. Maybe the "BIG" computer retail stores have closed, but

They're plenty of small neighborhood computer places that will build, repair or service just about computer you want, and they won't charge you an arm and a leg when doing so.

[NRaleighLiberal]

5. Thrilled Netflix users since 2006 here. no need for blockbuster.

awful selection, ridiculous late fees....a victim of a shifting paradigm

[Retrograde]

16. I go back to almost the beginnng with Netflix

and I've been happy with them. There's the odd damaged disk, but they replace those. And now that they're adding more downloadable features it's almost like video on demand.

Can't remember when was the last time I went to a Blockbuster.

[shanti]

54. absolutely!

i loooooove my netflix!

[Drunken Irishman]

6. Blockbuster will go the way of VHS...

I haven't rented a movie or game from Blockbuster/Hollywood Video in years.

I suspect in ten years there won't be any national video store chains.

[aquart]

22. Still using my VCR's.

Not everyone wants to or can pay monthly fees for watching or recording TV.

[Drunken Irishman]

25. It doesn't matter.

It's not about whether EVERYONE wants to or can pay monthly fees. It's about whether MOST want to and can.

I own a duel-VHS/DVD player for I can watch all my old VHS tapes. But I don't buy any movie on VHS if it comes out on DVD.

And I suspect most Americans do the same.

[Dulcinea]

52. I didn't know anyone still went to Blockbuster.

Everyone I know has Netflix or goes to the Redbox. My local Blockbuster sold out to the bare walls.

[RobinA]

60. Blockbuster

has a similar service to Netflix, which I use and enjoy, although it's worthless for a spur of the movie rental. Redbox is fine if you want the latest mass market crap and occasional semi-crap, but useless if you want anything geared towards the over-15 crowd. I realize I'm not the target audience, I have disposable income but am middle-aged, but yet another industry is losing my dollars because they've gone lowest common denominator. I used to rent, from Blockbuster, several movies a week when a) there were movies out there that appealed to people beyond 8th grade and b) when Blockbuster carried movies for grown-ups. Neither is true now.

[KillCapitalism]

7. They're going the way of the record store.

Which is virtually extinct. Netflix may be extinct in 5 years or so, as movies will most likely be rented via digital download.

[Romulox]

8. My local record store is doing great! Local Blockbuster has been gone for six months.

:)

[Crowman1979]

11. Netflix is already renting movies via digital download.

[jmowreader]

12. Redbox will take over the market for rental of DVDs

Netflix is into digital downloads now...but as for discs, why wait for them to come in the mail when you can go to a Redbox kiosk and rent one for a buck?

[Codeine]

33. Because I pay less than a buck for Netflix.

And the wait is only like a day.

[bedazzled]

42. not to mention they have movies i want to see. and that's not the new stuff!

i like old TV series. we're on deep space nine now --
i'd never seen it, and it's wonderful!

[Xithras]

69. It's not either/or. I use Netflix and Redbox both.

I get most of my movies through Netflix, and just re"prime" my queue every few months. They send me movies I want to see, and when I have a few free hours, I know the disc is there waiting for me.

There are occasionally situations where I need a few movies right away (kids having a sleepover, beer & poker night at my house, same day releases that I don't want to wait for), and for those I hit RedBox.

They each have their place, and they complement each other nicely.

Before RedBox, I dreaded those last minute rentals, because they generally meant spending way too much money and time dragging myself halfway across town to the nearest Blockbuster or Hollywood Video (Movie Gallery). Since the Redboxes popped up, I haven't been to either a single time. It's no wonder that Hollywood Video shuttered ALL of its local stores a few months ago (though I was a bit bummed to see GameCrazy fold along with it, that was a great store).

[Codeine]

31. Netflix already does digital streaming.

I have watched a shedload of films and tv series that way. Streams to my tv in dvd quality.

[TerribleLarryDingle]

9. It's about time

Now you can rely on Netflix, Greencine, and Redbox to rent you UNCUT movies the way the directors meant them to be seen.

[Dappleganger]

10. Put a fork in it already, they're done.

We are very happy Netflix users for both dvd's and streaming.

[wroberts189]

13. Poetic justice for all the long lost small family owned video rental stores. nt/knr

[Liberal_in_LA]

36. I remember having accounts at small video outlets. I switched to the big chains when they began

allowing 5 day check outs. The pressure to return a video the next day truly sucked.

[wroberts189]

45. I did as well... 30 copies of a movie unless you went on a weekend.

The smaller companies did not stand a chance.

There was an episode of Family Guy where Peter goes into a "major chain" and asks them where the backroom is "You know...the adult section" ..responded with "We are a family store" ...funny.

[Liberal_in_LA]

58. It's seems weird that one LA chain (20/20 video) still has the backroom, a curtain between the reg

video and gawd knows what else.

[proudohioan]

15. Blockbuster can't compete with the Euclid Public Library,,,,,

seriously! I haven't needed to rent a movie in years.

[AnOhioan]

29. Fellow Euclidian :) Very cool :)

[proudohioan]

35. Ah yes, so you know what I mean about the library!

:hi:

[HughBeaumont]

61. Avon Lake PL has a killer selection also . .. .

Problem is, you have to get there at 9:00 AM to get the first runs. But all of the classics are still widely available, even some obscure ones. Great selection of documentaries as well.

[proudohioan]

64. Avon Lake is really beautiful.

My son was in a competition held at the Avon Lake HS. What a picturesque little town!

Ohio has one hell of a library system, that's for sure. Is Avon Lake PL part of Clevenet?

[HughBeaumont]

67. Wish it was, but it's not.

I asked that as soon as I moved there.

AL, like all other NE Ohio suburbs, has it's faults (kind of overrun with Bewshite fundies and bootstrappers), but it also has a decent sized Democratic contingent, great schools (top 50 in the state) and public officials that actually do things for the community and children at large. A great library with an interactive discovery center for kids helps a lot.

[customerserviceguy]

62. You got it

If the library is at all convienient, then that's the best choice for something that's been out there awhile. Next best is swapping small bundles of DVDs with friends for a few weeks, many people have movie collections that just gather dust on a shelf.

[proudohioan]

65. Yes, we like to swap DVD's also.

We usually wait for newer stuff to come to the library, but do utilize the Red Box on occaision. You can't beat the price!

[mn9driver]

17. Dinosaur. Technology has moved on. nt.

.

[YOY]

18. There's this Hollywood video close to me.

Been closed for a year. What a waste of good retail space.

[Liberal_in_LA]

38. Mine closed within the last 6 months. Huge space sits empty

[Hawkeye-X]

19. Hated Blockbuster. Good riddance to bad rubbish.

n/t

[Roland99]

24. I dig my Blockbuster subscription (and the free in-store exchanges)

Found it a better performing deal for me than Netflix.

[dkf]

27. Luv my bbv total access

Cheaper than netflix with instant gratification via in store exchanges. I get my bluray discs without paying extra. I hope they hang on.

[callous taoboy]

47. BB corp is big Mepublican donor last I checked. NF big Democratic donor.

[dkf]

53. Well my $18 plan now costs $28 but I'm grandfathered in.

So I'm kind of taking advantage of them.

[47of74]

26. I haven't rented a movie in quite a long time

The last one was Indiana Jones IV, which I rented through Netflix.

[Raston]

28. To they day they don't want my business

I wanted to rent but they only open accounts for people with credit cards and I only keep a debit card. No cash, it's give us your credit card data or go away so I did.

Their business model has always sucked, I don't know how they ever got so big in the first place. Screw 'em.


- Raston

"If you're not angry, you're not paying attention."

[wickerwoman]

72. Yep.

One of their employees stole my parents credit card information and it was an absolute bitch getting Blockbuster to do anything about it.

Plus they were one of the first companies to make you check your backpack at the door instead of carrying it inside.

Treating your customers like criminals = bad business.

[PoliticalOne65]

30. I can go to my local library

I can go to my local library, and check out all kinds of movies for free. The video, and dvd section at my library is bigger then any video store in town. Business's go under. Sometimes they just outlive their usefulness.

[Endangered Specie]

34. Won't miss them a bit, the company deserves whatever happens to it...

$1.50 to rewind bullshit

[alcibiades_mystery]

43. What does "rewind" mean?

:evilgrin:

[Cha]

70. I almost forgot..I was one of the last

ones of my circle to get a DVD player and now..I forget all about rewind? :)

[deacon]

39. They've been in serious trouble ever since Netflix launched. n/t

[Jimbo S]

40. I've never patronized them.

Do they still drug test the cashiers?

Edit the movies?

Not a business model I wish to support.

[TrogL]

41. My daughter applied for work there

...and probably isn't going to get the job 'cause I'll bet the store is due for closure.

The only reason I go in there is the $2 movies in the remainder bin.

[Quantess]

44. Blockbuster did things to drive away customers, back when they were a force to be reckoned with.

The late fees really got out of hand, and I know several people (including myself) who stopped renting from Blockbuster and went to Hollywood instead. Now they're both in trouble.

[Tabasco_Dave]

46. Blockbuster almost killed R rated movies

They put a lot of pressure on the major studios to make PG and PG13 movies and would refuse to distribute many R rated movies. Since Netflix and Redbox where established, more R movies like Saw and Grindhouse, have been coming out, in the last three years. It's not a coincidence.

[bigworld]

49. what?!

All I ever see at my local blockbuster are 200 copies of the various Saw permutations and other gore porn stuff.

[TheWatcher]

48. I Guess They Weren't "Stupidly Optimistic" Enough.

;)

[Juche]

51. netflix, the library & redbox are all I use

I don't think I've used anything else for a few years.

Another big issue is price. Videos are roughly $1-2/each via these outlets (some free at the library), but they cost more at places like blockbuster.

I do think there is still a role for blockbusters though. Redbox carries a very limited selection and netflix takes a day or two to get a movie. But it'll be more of a support role rather than a primary role.

[bikebloke]

55. I stayed with my local brick & mortar as long as I could.

Hollywood Video. But they were getting nothing but straight-to-DVD crap. Probably because they figured people in the mood for a movie wouldn't walk out empty handed. But I did. Plus, I'd return movies the next day, but they wouldn't scan them in until a few days later accruing late fees.

Then I tried Netflix, which carries a huge selection of foreign films which I go for. Hollywood shot themselves in the foot.

[jayfish]

56. Problems With The Red Box and Netflix Models.

I'm not going to pretend to be broken up about the failure of BB. They sucked. There are some challenges to consider with the whole kiosk and/or mail order model though. The biggest, in my mind is servicing low-income or technology challenged people. Many people don’t have the means or ability to rent movies via Netflix. You have to have an internet connection, credit card and stable mailing address to maintain an account with Netflix. You also have to be able to figure out where NF is and how to use it. I live in a predominantly low income area and the local DVD rental (not BB) is always packed. Another concern is content availability. Specifically in regards to new-release content. Both Redbox and Netflix recently agreed to delay distribution of new-release content from Warner Brother for 28 days from the date of release. Without strong brick and mortar competition, what’s to stop them form doing the same with all new-release content. Be careful what you wish for.

FSH

[Liberal_in_LA]

59. Thanks for remind us that not everyone has a credit card, internet, mailing address or even

a phone. These folks are getting left behind in the internet age.

[Cha]

71. We have a small family owned video store on the corner

of Main Street in our town for those who don't use the internet.

I like the netflix freedom of not having to return it when it's due without a late charge.

[RobinA]

63. Obviously,

people without an Internet connection and a credit card don't exist, don't you know this? This has been the case for some time. Probably everytime I am standing in a big chain store, some poor schmoo comes in the door and wants to apply for a job. The response is "You have to use the Internet." Now, I use the Internet for EVERYTHING, but I work with the poor, many of whom have never touched a computer. My favorite? Applying for welfare on the Internet. Now, it's nice for ME, because I often apply for people on my computer at work. However, very few people who are in need of welfare, common perception notwithstanding, have advanced, or even unadvanced, electronics in their homes. Yet the 10 minutes of recorded message when you call any welfare office urges you to use the internet to have your questions answered or to apply.
:banghead:

[Yavin4]

57. There's A Reason Why Premium Cable Channels Emphasize Original Programming These Days

Consumers can get feature films in a myriad of ways, Netflix, RedBox, Satellites, Digital downloads, pay cable, etc. It's extremely difficult making a profit off of renting feature films, unless you rent hard to find features and porn, neither of which Blockbuster does.

Premium cable outlets like HBO, Showtime, and Starz are building their models on original programming content with shows like "U.S. of Tara", "True Blood", "Big Love", "Weeds", "Crash", and "Spartacus".

[katty]

66. No surprise here...they've been hanging by a thread