Blockbuster to declare bankruptcy

Blockbuster to declare bankruptcy

What better juxtaposition to this story from yesterday than the report that Blockbuster plans to file for bankruptcy next month? The former home video monolith—which once upon a time struck trembling fear in the hearts of the mom-and-pop shops it swallowed up or sent fleeing to the outskirts of town—has amassed an impressive $1 billion late fee with creditors, and has struggled to compete with the public’s shifting favor for streaming and disc-by-mail services like Netflix. Last week Blockbuster executives held meetings with six major movie studios (20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Walt Disney Studios, and Warner Bros.) to discuss the Chapter 11 bankruptcy it will enter into in September, and to ask for their support in the form of an uninterrupted supply of DVDs so it can get back on its feet.

And while that sounds like a lot to ask, the L.A. Times reports that most of them are “supportive,” hoping that Blockbuster sticks around as a competitor to services like Netflix and Redbox, especially since Blockbuster’s closest rival, Hollywood Video, shuttered its stores earlier this year. If it does survive, Blockbuster hopes to move further away from traditional retail toward Redbox-like kiosks and Netflix-like digital distribution—which could be too little too late. In the meantime, it will try to escape the leases on 500 or more of its stores, adding to the 1,000 that have already closed this year. In possible good news for people who do use those other services, this could end up affecting Blockbuster’s current 28-day stranglehold over new releases, which maybe one day will be seen as the last overreaching power-grab from a dying empire.