Dish Serves Bad News for BlockBuster Employees, Closing Remaining Stores and DVD-by-Mail Service

Many years ago, I helped run a local mom-and-pop video rental store. Business was okay, but not great. By the time I came onto the scene, chains like Blockbuster and Hollywood Video had started putting the squeeze on independently owned stores by inking revenue sharing deals with movie studios. While we analyzed metrics to see how many copies of a new release we could afford to buy and still turn a profit in our modest space, these big chains would receive shelves full of new flicks and share revenue with the studios. It was tough to compete with that (we weren't afforded the same or even similar deals), and like every other mom-and-pop video store, we eventually closed up shop.

I find it a little ironic (and sad for the employees involved) that years later, Blockbuster now finds itself in a similar situation. Just as the big chains put independently owned video stores out of business, streaming video services like Netflix and Hulu have now destroyed Blockbuster's ancient business model. Blockbuster may have accelerated the demise of shops like the one I worked at, but it too was on a path headed towards a dead end, only it didn't know it yet.

Blockbuster Closing

In any event, it's now officially the end of an era (you could argue the era ended several years ago, and I wouldn't disagree with that). Blockbuster held on as long as it could, but reality being a stone cold killer at times, Dish Network today announced plans to close Blockbuster's approximately 300 remaining stores in the U.S., as well as its distribution centers, thereby ending its DVD-by-mail business.

"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," said Joseph P. Clayton, Dish president and chief executive officer. "Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings."

That's what is left of Blockbuster at this point -- a brand. Dish plans to cease Blockbuster's retail operations in early January 2014 and DVD-by-mail service in mid-December, leaving Dish with only a brand name and video library. Going forward, Dish will use the Blockbuster name to promote its own satellite TV offering.