It's Official -- Bye Bye Blockbuster
With Netflix and Redbox/Coinstar aggressively expanding, nothing left for Blockbuster except the Packard Bell gambit (ie trade its name and no longer make product)..NCR is seen as potential beneficiary in all this adding a twist.
The slogan used to be "Make it a Blockbuster night." Now the slogan appears to be "Make it a bankruptcy month."
Home video rental chain Blockbuster told Hollywood studios earlier in the month that it plans to file for bankruptcy in September, coming after dominating the the video rental business for more than a decade.
Blockbuster could no longer compete with companies like Netflix (NASDAQ: NFLX) and Redbox, a subsidiary of Cointstar (NASDAQ: CSTR).
It met with six major studios last month in Hollywood, according to a source, and said the company would file a "pre-packaged" bankruptcy.
Blockbuster hopes that during the Chapter process that it will be able to restructure its debt, currently at $1 billion, as well as get out of leases on at least 500 of its 3,425 stores in the United States.
If the company can continue receiving the support of Hollywood's film studios during the bankruptcy, this will be a major coup for Blockbuster, so that it can continue receiving new DVDs.
Since the beginning of 2008, Blockbuster has struggled mightily, losing $1.1 billion. The company hasn't been able to grow the business due to the massive interest payments on its $920 million worth of debt.
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Posted by staff at August 27, 2010 09:04 AM