Bad News for Blockbuster

Bad News for Blockbuster

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Blockbuster, the world's largest video and game rental company, has admitted that its huge debt load has left "substantial doubt" that it will be able to continue as a "going concern."

Blockbuster is struggling under the weight of $781 million in debt and while the company said last week that its revolving and term loan agreement had been amended to give it $250 million in revolving loan refinancing, on Monday it was revealed that the deal was subject to certain conditions which the company may not be able to meet.

Even if the loan is granted, Blockbuster warned it "may not have sufficient liquidity to finance the ongoing obligations of our business, which raises substantial doubt about our ability to continue as a going concern."

Launched in 1985, Blockbuster grew to become a behemoth in the video and game rental business. But the company has struggled in recent years against online movie distributors like Netflix, while its own attempt at launching a set-top box for on-demand movies was very poorly received. It doesn't sound like the company is expecting things to turn around substantially in 2009, either; the company also reiterated its forecast for the 2009 fiscal year which called for lower worldwide same-store revenues compared to the fourth quarter of 2008.

Sources: Engadget, Financial Post

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When it tried to merge with Circuit City last year I knew that was pretty much the beginning of the end.

I use Netflix myself, and I must say I've sort'f been expecting this.

But that's the nature of the beast.

Good riddance, I always hated blockbuster.

I just...didn't like it...

Bah. My wife and I are customers of Blockbuster Online, and for the most part, we've enjoyed it without much complaining. The thing we liked best was being able to turn our online-DVD into the store for a free rental of a different movie.

Of course, there will still be a market for DVDs gained without the postal service for quite some time, so I don't see them tanking totally.

Can't say I care.
If I want to see a movie, I just go get it from the Redbox.

This sucks. Well I use a smaller chain video store to rent games since it's alot cheaper there than it is at blockbuster and you don't need a credit card to rent 360, PS3, or Wii games.

Does that mean games I have with the game pass won't have to be returned?

Rental places are doomed. There's no way they can survive unless they completely copy netflix

I use local rental buisnesses. Support the little man, and stop being lazy, ya bums!

I never liked Blockbuster... I prefer Hollywood Video.

Hasn't Blockbuster been on the verge of bankruptcy since like 2005?

I know I only rent from local chains anyway.

Doesn't matter what Blockbuster I go into, the service is always the same - terrible. I've been to quite a few different stores in different parts of Ontario too, still the same crappy service.

I won't be too sad to see them go, however I'm guessing that'll be alot of jobs...

I only really used them to play a game I didnt want to buy

Like Assasins Creed

Can't say I ever liked them. Late fees FTL.

RougeWaveform:
Rental places are doomed. There's no way they can survive unless they completely copy netflix

Am i the only person who does not have a complete knowledgde if what Netflix is ?

i know it's a video rental and watching service online

but thats about it

Strong Intelligent:
Good riddance, I always hated blockbuster.

I just...didn't like it...

I miss jumbo video, when I was little they had free popcorn..

Sucks that they're going under but like someone said up stream that's the nature of the beast.

UNKNOWNINCOGNITO:

RougeWaveform:
Rental places are doomed. There's no way they can survive unless they completely copy netflix

Am i the only person who does not have a complete knowledgde if what Netflix is ?

i know it's a video rental and watching service online

but thats about it

Then you know exactly what it is.

It's time for Blockbuster to die if they can't keep up with technology.

Getting a loan is not gonna help a thing, and I think you'd be crazy to pour money into that company.

Who? Do they even exist in Europe?

Bring back VHS tapes and we'll work something out there BB

Abedeus:
Who? Do they even exist in Europe?

Who, Blockbuster or Netflix. I'm not sure about the latter but Blockbuster certainly does. It's just overshadowed by other companies that don't have late fees (the biggest known one in the UK probably being lovefilm).

Blockbuster is probably going to end up turning into a Netflix clone, or more likely, being bought out and absorbed into Netflix itself. I have a feeling Hollywood video is next on the chopping block, if not already.

Civic Video is cheaper and has nicer bosses.

RougeWaveform:

UNKNOWNINCOGNITO:

RougeWaveform:
Rental places are doomed. There's no way they can survive unless they completely copy netflix

Am i the only person who does not have a complete knowledgde if what Netflix is ?

i know it's a video rental and watching service online

but thats about it

Then you know exactly what it is.

Oh.

RougeWaveform:
Rental places are doomed. There's no way they can survive unless they completely copy netflix

Not necessarily, last I heard the box style vending machine rentals you see starting to pop up in super-markets are doing quite well. They have great locations that promote impulse buying and little overhead.

RougeWaveform:
Rental places are doomed. There's no way they can survive unless they completely copy netflix

i dont agree, well not in canada anyway. i worked for blockbuster 3 years ago, and i realised that lot of people want to talk to somebody, to have advice... and now that i dont work there, i like that the employes there know me (yeah i go there often) and they tell me when a new movie that i might like is out.

in canada they are doing quite well in fact, so i hope the canadian branch could live on it's own if the american company crash

I like blockbuster and I'd hate to see my local one close as only place rent games this side of town and do a hell of a lot better deals for trade ins than Game or game station cheaper too to buy them.

This is unfortunate but expected. Blockbuster has been playing catchup with Netflix ever since it came out and took a significant chunk out of its business with a model that had no time limits, no late fees, and convenient and faster delivery. Blockbuster has been trying to keep pace with an abolishing of some late fees and its own service, but really, the brick and mortars just don't have the appeal of queuing up your releases and getting them within a day or two.

Netflix's agreement with Microsoft for digital delivery to the 360 pretty much was the final nail in the coffin, as it was the last frontier over which Blockbuster could have gone. Their only hope might be doing something like cutting a deal with Sony and trying to get in on the blu-ray stuff, but even then it's a risky venture.

Unless Blockbuster considers trying a variety of new business practices, they're just about dead in the water. It's too bad they won't consider something like putting up kiosks like RedBox or getting into the video game rental business so they can deliver games faster than the awful Gamefly and Gamerang services.

The worst part about it is, rain or shine for Blockbuster, the brick and mortars are probably done, and that's a lot of people out of work.

Blockbuster is an epic fail, and it would take me two pages to explain why. Let's just say that their computer systems in their stores are completely useless.

Check it out guys:

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090421006341&newsLang=en

Through NCR, one of the worlds biggest manufacturers of ATM machines and other automated kiosks, Blockbuster is diving into the kiosk rental market head-first. They only have a few hundred locations so far (mostly in circle K's) but they are aggressively expanding.

And if you happen to actually see one of these units...check the 'coming soon' animation on the built-in HD screen. My company built the animation and we provide the trailers. Let me know what you think!

*runs to blockbuster for loads of rentals*

My wife hates Blockbuster because it smells like B.O.

This was inevitable.

I am confused, will branches in the UK close also or is Blockbusters run by other companies in the US?

 

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