Blockbuster Inches Closer To Failing, Has To Delist From NYSE
Netflix was grown consistently over the past few years, and at the same time, Blockbuster has seen fewer and fewer customers enter their stores. Blockbuster even tried the by-mail approach, but it was after Netflix grabbed the majority of those interested in such a service. Furthermore, Netflix offers something that Blockbuster doesn't: Watch Instantly. This allows Netflix subscribers with plans of $9/month or more to watch unlimited streaming films and TV shows from their PC or a variety of televisions or set-top boxes. That's a huge value-add, and Blockbuster has thus far been unable to create any acceptable substitute. Or at least one that people will pay attention to.
Over the July 4th weekend, the company has found itself fighting for its own freedom. Freedom from debt. The company has recently won approval to stay just one step ahead of bankruptcy, but it's only a one month reprieve on debt payments. Still, it was forced to delist from the New York Stock Exchange, which is a massive fall from grace. Once companies are forced to delist, it's a hard road back to recovery. In fact, most companies either fold or put themselves up for sale rather than attempt to pick up the pieces and start over.
Now, those holding around $440 million in debt have agreed to lay off until August 13, though some analysts suggest that even the month won't help Blockbuster to recover. Michael Pachter, analyst with Securities, had this to say: "Six weeks is not a long time in a tough economy, where nobody has much credit. There's nothing on the horizon that makes it look like Blockbuster is going to be more profitable."
It's hard to think that Blockbuster will ever be half the company it was, but could it shift itself enough to just stay alive? Who knows, but we're all hoping it doesn't follow the same path as the once-mighty Circuit City.