The Block Is Busted: Video Rental Giant Files For Bankruptcy

The Block Is Busted: Video Rental Giant Files For Bankruptcy

The miracle Blockbuster executives were hoping for has failed to arrive; the company filed for Chapter 11 today. Blockbuster has filed for Chapter 11 and intends to continue to operate its 3,000 US locations while the bankruptcy proceedings are under way. It's hard to imagine how the company can meaningfully survive—executives have promised to reduce debt levels from approximately $1 billion today to just $100 million. Presumably much of the unprofitable fat has already been cut; Blockbuster has closed 1500 stores in order to cut costs.

"Blockbuster is under the gun now to generate as much cash as possible," said Michael Pachter, an analyst with Wedbush Morgan Securities. "When they were run by shareholders, the company was making investments and trying to grow. Now that they've been seized by creditors... Blockbuster will have to manage the business as lean as possible."

In theory, the Blockbuster brand still contains value and the retail locations themselves are probably sitting on some prime land, but the very nature of this discussion highlights how much the market has changed. Even ten years ago, the idea that a home entertainment monster like Blockbuster would find itself in bankruptcy was ridiculous. Now, the question is how effectively BB can compete with companies like Netflix and Redbox, assuming it'll ever be able to compete again at all. 
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They should have seen the signs a long time ago. This is another example of executive who want business as usual in an industry that is constantly changing. They should have known after the death of VHS that they had to restructure. Instead they were to busy buying up sports stadium and concert venues.

Or maybe they knew that Blockbuster Online would never be successful. I mean who would want to rent from BO:P

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I should have known something fishy was going on last time I was in BB last year the sales guy was pushing hard this upgrade I "have to get"!!!!! I was unsure but to shut him up I upgraded and he looked at his coworker and said "See,,,that's how you do it".

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I used to love going to block buster on the week end as a kid and pick up some games to play over the weekend with friends. I remember a few times the cashier would forget to scan one of my games and i got a free game, good times. Today i rarely go to block buster since every thing over priced.

Going to go check out their web to see if this is causing them to finaly drop their prices.

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It was inevitable. Guess this means I don't have to pay my late fees? lol

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No, this means they will hunt you down for their money :P lol

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When I was young I lived outside of the closest major city so going to Blockbuster was a big deal.  It would take us about 40 minutes to get there but once you did you had what looked like acres and acres of movies, movie posters in the window with lights flashing around then, TV's showing previews or playing movies and video games and systems for rent.

I loved that place.  It was also the place that started me on my way to a love of anime since they were the only place you could rent it from.

It certainly is sad to hear about this but the entire retail landscape as a whole has changed.  From clothes to groceries to travel.  Block Buster just couldn't keep up coupled with the rampant piracy of videos and games.

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News:
Blockbuster has filed for Chapter 11

Good riddance!

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