Blockbuster declares bankruptcy, will stay in business

By on September 23, 2010, 12:30 PM
Unsurprisingly, the struggling Blockbuster movie rental empire has filed for Chapter 11 bankruptcy protection in the United States, nearly 25 years after it opened its first store. The once-mighty video rental chain won't be, however, closing its 3,000 remaining stores, DVD vending kiosks, by-mail, or digital services, yet. It has struck a deal with its bondholders for a refinancing plan; more than 80 percent of its secured creditors gave their approval. Under the plan, Blockbuster's debt would be reduced 11-fold.

The company is trying to figure out how to get rid of its $1.46 billion debt through a restructuring deal that will leave studios like 20th Century Fox, Warner Home Video and Sony Pictures high and dry, according to Bloomberg. The deal also involves a $125 million loan to help keep its stores running; Hollywood execs may not like it, but keeping Blockbuster afloat is important to making sure competitors like Netflix don't get too popular.

Blockbuster simply couldn't compete with Netflix's mail DVD subscriptions and eventually had to raise its prices. The chain still has its Blockbuster On Demand streaming service and its NCR-operated Blockbuster Express kiosks to lean on, but it's going to be an uphill battle.

User Comments: 9

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TomSEA TomSEA, TechSpot Chancellor, said:

No surprise. BlockBuster arrogantly sat on its (temporary) pile of money, while NetFlix and RedBox blew by them with innovative marketing and new technology.

In these days of ever-changing technology, if you snooze, ya loose.

Cueto_99 said:

Outside the United States, where there is no access to Netflix, Blockbuster is one of the few options to rent a Blu-ray movie for a low price, its true what Tom says, but unfortunate for me...

tengeta tengeta said:

Blockbuster gave their customers the shaft for years knowing there were no options once they crushed the grocery store rental competition. It sucks for them, but I really can't feel bad one bit, the only people I feel bad for are the ones like Cueto_99 who still don't have another option.

viperpfl said:

Blockbuster is still in business? The problem with Blockbuster is they wanted to stick with the old business model. They couldn't grab the concept that people didn't want to drive to the video store anymore. That it was easier just to sit at home on your couch, find the movies you want, and get your movies in 1 to 2 days. I always found that 99% of my time driving to Blockbuster was a wasted trip. They never had any new movies available to rent for that day. I wanted to rent a new movie one time, I had to wait over a week before it was finally available. I went to Netflix for the movie, and I got the movie in 1-2-3. With getting movies online, you get order movies 24 hours a day, 7 days a week, 365 days a year.

I use to have a subscription to Blockbuster online, but I eventually dumped them. I dumped them because they lowered the amount of movies you could get by mail. They lowered the amount because they still wanted me to go to the store to get videos. My lifestyle changed, I didn't want to drive to the video store anymore. After working a long day, I was to tired to drive to the store and look for movies. Blockbuster lost my business and I went to Netflix.

LNCPapa LNCPapa said:

I can't feel bad for them either - I've been boycotting them for 2 years now. Horrible business practices.

KG363 KG363 said:

I hate the idea of Netfilx. If I want to rent a movie, I rent it in a store. However, with Uverse's on Demand service, I have no need to rent

treetops treetops said:

Good Blockbuster has been screwing us for years with there high prices. They actually tried to sue netflex a few years ago something to do with there low prices saying they were directly targeting blockbuster.

If they have the market in your country cuteo im surprised there doing so poorly. You might want to invest in a blue ray burner and find somewhere you can download\buy blue ray movies or simply aye aye matey them.

Wendig0 Wendig0, TechSpot Paladin, said:

I have no pity for Blockbuster. They're going down faster than an intern in the oval office, and have been shafting customers for years, while Netflix gives its customers unlimited access to movies for a mere $9/month. Piss on Blockbuster.

LightHeart said:

As everyone has mentioned Blockbuster has been going down hill for quite some time. The issue with BB is that once successful they didn't know how to maintain that sucess. Then caught trying to play catch up with Netflix and Redbox they made and continue to make many mistakes. They really have nothing left to offer.

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