Blockbuster to Close Over A Fifth of All US Stores

[John Funk]

Blockbuster to Close Over A Fifth of All US Stores

Continued pressure from services like Netflix means that Blockbuster Video will be closing almost 1,000 stores all across the United States - more than double the amount previously planned.

Times have been tough for major video retail chain Blockbuster, and it isn't just because of the recession, either. Two of the once-dominant chain's competitors - mail-rental service Netflix and the Redbox kiosks found in convenience stores and markets worldwide - have sharply encroached on its territory, and the chain may be closing almost 1,000 stores all across the country by the end of 2010, reports Yahoo! Finance [http://finance.yahoo.com/tech-ticker/article/331218/Blockbuster-Closing-Hundreds-More-Stores-Than-Planned?tickers=bbi,nflx,cmcsa,twc,goog].

[blockquote]According to a regulatory filing Tuesday, Blockbuster expects to shut between 810 and 960 locations by the time next year wraps up, a number that would exceed more than one-fifth of its current U.S. shops.

That's quite a step up, or back depending on your perspective, from Blockbuster's previous plan, which anticipated 380 to 425 closings in that time frame. Here's how the corporate office sees it: Blockbuster characterizes 35% of its stores as "core," while saying 47%, or nearly half its total, are profitable, but still "non-core." The remaining 18% aren't turning a profit.[/blockquote]

Though Blockbuster still took in $5.3 billion in revenue last year, that was a step back from $5.9 billion in 2005 - over the same period of time, Netflix saw its revenue swell from $682 million to $1.3 billion. This sizable increase was, no doubt, supported by its lion's share of the video-on-demand market, with 9.4 million users in an estimated 12-million-strong market.

The chain is still a far cry away from bankruptcy, but closing down more than a fifth of your installations can't be good. If you're currently employed at Blockbuster, I'm not going to say that you should break out the ol' resume, but it can't hurt to keep it updated. Just in case.

(Thanks, chronobreak!)

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[Therumancer]

Hmmm, well the economy is a mess and it doesn't surprise me even retailers like Blockbuster are getting hit, though like most businesses they are taking the opposite approach to actually solving the problem. You know, shutting down locations to create even more unemployed people and abandoned retail spaces to compound the problem where I'd imagine the right thing to do both for themsevles and everyone else would be to stick it out. A bit of a "loss" now and they can milk it when things recover by saying their a business who stuck it out for the people during the depression... but hey, that's just my opinion.

As far as Blockbuster going out of business entirely, I don't see it happening. There is simply put too much of a vested need for the service they provide from Hollywood and other movie producers. I'm not talking about the big Hollywood productions, but all those independant "direct to video" movies which form a huge business. As great as services like Netflix and such are it's the Blockbusters and such that actually hold on to the basic product (DVDs, etc...) that keep them going. I also feel that when it comes to that kind of stuff Blockbuster is still the trough of choice for fans of quality schlock.

Also I should point out that Blockbuster could also probably help their case by reviewing some of the policies that have caused people to want to go to download based rentals and such. Some of their policies involving late fees and such can be quite ruthless, not to mention the whole issue of needing a Blockbuster membership at a time when you can just
plug an 360 in with a free silve account and DL a movie for a similar price. Basically when you consider their entire business model they just aren't being as competitive than they could be, and I think with some changes they could make things a lot more profitable than they are now, albeit not as profitable as they might want.

 

[DrunkWithPower]

I hope my local Blockbuster is next, I always get the scratched disks!

 

[Radeonx]

Damn, I get all my rentals from a nearby Blockbuster, hope it doesn't close. Though as rumancer said it won't go bankrupt, at least not in the short-term.

Personally, I find Netflix to be much better. I believe there is a site for renting games just like Netflix also, although, I use Blockbuster a lot.
EDIT: It's called Gamefly.

 

[scotth266]

I prefer using my local video rental store, so I'm not too fussed about the state of Blockbuster.

 

[ZeroMachine]

The good side: most are selling their stuff for dirt cheap. I just finally got a copy of Serenity for 4$.

 

[BehattedWanderer]

This is intersting news. More than double their esimate, eh?

Does anyone have the monthly rates for Netflix and/or Gamefly? I've been intersted, but can never mind the rates for after the $9.99 trial period. Does anyone know what those rates are like?

 

[NeedAUserName]

I honestly don't see why people use Blockbuster to rent DVDs, and to a lesser extent games, as you can buy almost DVD they rent cheaper on sites like eBay and Amazon.

 

[Simalacrum]

Blimey, thats quite a significant number of closures... oh well, no empire lasts for ever, that includes cooperate ones. Just you wait, one day Macdonalds and Microsoft will see the same fate... just... maybe not in a REALLY long time

 

[Zac_Dai]

Ahh the free market in action. Even the biggest aren't immune.

 

[chronobreak]

They're done, plain and simple. They may be able to keep afloat for a few years, but unless they do a total 180 with their business plan, I can't see them winning out over RedBox or Netflix. Maybe they should turn into a home-theater sales place or something instead.

 

[Pimppeter2]

Shit I hope my local one wont go. I wanna get a job there

 

[Joshimodo]

Mmm, unemployment.

 

[kawligia]

I can't even remember the last time I set foot in a Blockbuster. :\

 

[Heathrow]

People don't dig human interaction anymore. Movie rental stores are doomed.