Blockbuster On The Chopping Block
Thanks to a massive increase in competition, it looks like Blockbuster could be on the verge of going bust. Even after announcing a number of new movie delivery services at the CES show, the company seems to have buckled after many years of playing second fiddle to Netflix, DVD vending machines, and of course online tv streaming from websites such as Hulu. It may be time to shut the DVD case on Blockbuster who yesterday announced that it may push for Chapter 11 bankruptcy protection.
Are Blockbuster Busted?
The ailing DVD giant has just a few short months to manage its debts and steer the sinking ship rental business or it will be forced to file for bankruptcy protection. The Dallas based company has warned investors in the company for the second year in a row that it may have to file for bankrutpcy. Blockbuster pointed to “significant liquidity restraints” and a pile of steadily mounting debt problems for its woes.
“The increasingly competitive industry conditions under which we operate has negatively impacted our results of operations and cash flows and may continue to in the future,” Blockbuster reps wrote, according to the Associated Press. “These factors raise substantial doubt about our ability to continue as a going concern.” According to the Guardian, Blockbuster lost $569 million last year, and is currently struggling to deal with more than $975 million in debt.
Shares in the company reacted by falling to 28 cents on Wednesday afternoon, even as Blockbuster pledged to do more to haul its business into the 21st century. The Associated Press reports that Blockbuster opened 2,000 DVD rental kiosks in 2009. Some 10,000 more will apparently be opened by midway through 2010. Meanwhile, Blockbuster has pushed its own DVD-by-mail service, which costs between $8.99 and $16.99 for a monthly subscription.
Blockbuster has a mountain to climb before the company is on equal footing with Netflix who have 12 million plus US subscribers, and Netflix exec Reed Hastings has said that video streaming services will go be going global big time this year.
With mounting competition from all sides, the future is looking bleak for Blockbuster unless a buyer comes in you maybe renting your DVD’s from someone else, that is if your not just downnloading them.
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[...] Thanks to a massive increase in competition, it looks like Blockbuster could be on the verge of going bust. Even after announcing a number of new movie delivery services at the CES show, the company seems to have buckled after many years of playing second fiddle to Netflix, DVD vending machines, and of course online tv streaming from websites such as Hulu. It may be time to shut the DVD case on Blockbuster who yesterday announced that it may push for Chapter 11 bankruptcy protection. View the Original article [...]
[...] indicate that Blockbuster is preparing to file for bankruptcy within the next month, following many reports of their expected downfall. In an amazing turnaround from the glory days when Blockbuster bulldozed all competing video rental [...]