Blockbuster Calls It A Bust
By Sam Lewis
Video rental chain closes remaining corporate stores, ends DVD-by-mail service
It won’t be long before a trip to a video store is a thing of the past. Blockbuster, the 28-year old Englewood, CO-based video rental chain announced on Wednesday, Nov 6 that it will be shuttering the doors of its 300 remaining corporate stores early next year. The company also announced it will be shutting down its “Blockbuster By Mail” service in mid-December.
The news isn’t entirely bad for the company, owned by DISH network, as franchised and licensed stores will remain open and DISH will keep the licensing rights to the Blockbuster brand along with its video library. DISH says it will focus Blockbuster efforts on streaming video and on-demand services it currently offers customers. “This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” says DISH President and CEO Joseph Clayton.
Time hasn’t been on Blockbuster’s side and it seems no one has been able to bring the company with the blue ticket stub logo back to relevance. Back in 2000, Netflix — the company most responsible for the boom of streaming, on-demand video — offered itself to Blockbuster for $50 million. Blockbuster declined, marking the start of Blockbuster’s decline from the top of in-home cinema entertainment.
Mimicking Redbox, the DVD and Blu-ray rental kiosk company founded in 2002, Blockbuster decided in 2009 it wanted to offer its customers the same convenience in video rental and launched an identical program called “Blockbuster Express.” Just one year later, the company’s investments appear to been for naught, as Blockbuster announced huge losses in revenue, the closing of several stores, and filed for Chapter 11 bankruptcy — where DISH picked the company up at an auction price of $320 million. In 2012, Redbox spent $100 million buying Blockbuster Express, paying for the rights to all the company’s kiosks.
Even with steady decline over the last decade, DISH isn’t ready to give up on its bankruptcy auction purchase. DISH execs believe the Blockbuster brand accompanied by its extensive video library can be used in streaming and on-demand digital video formats. “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,’ says Clayton. Blockbuster’s new website reinforces this, “You’ve known us for years, but who are we now? Well, we’re different. We’ve grown. We’ve changed. Still, one thing has remained the same: We love movies. And now we’re taking that love to the next level.”
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