Blockbuster Planning Mid-September Bankruptcy

It's not like we all haven't seen this coming for quite a while now, but Blockbuster is reportedly informing the six major studios that it plans to file bankruptcy next month.

The aim, according to The Los Angeles Times, is to use a planned five-month bankruptcy period to get out of the leases on 500 to 800 of its most in-the-red stores. After that, Blockbuster—which has made a habit of coming late to the party over the past decade or so—intends to expand its Redbox-alike kiosk partnership with NCR. They'll then take another stab at competing with Netflix and Video-On-Demand offerings such as Amazon's in the online streaming arena.What I find most interesting about this is that Blockbuster, despite their seemingly unending stream of business missteps and consistent march towards irrelevancy, remains the chosen child of the Hollywood studios. While Netflix and Redbox have had to concede to 28-day non-rental windows with Fox, Universal, and Warners (with more similar deals surely to come), Blockbuster continues to enjoy the ability to offer movies on DVD and Blu-ray for rent the day they're released. And yet, they've been completely unable to parlay this competitive advantage into a monetary one—or maybe it's the only thing still keeping them afloat.This perceived favoritism is why the studio heads are the first to hear about the rental chain's mid-September plans: Blockbuster wants to remain in the studios' good graces and avoid having to make the same concessions as Netflix and Redbox.Blockbuster apparently has sought and gained the support of the big studios with their proposed bankruptcy, because the studios like competition in the rental industry and want it to continue to be fierce. Companies trying to out-do each other are willing to pay more to license movies than those that are the only game in town. Blockbuster sounds confident that they'll continue to compete for the foreseeable future, and the bankruptcy move is part of that long-term plan. I really think they'll have to innovate instead of imitate, though, if they have any hope of finding—or regaining—enough customers to ever again turn a profit.

Comments

[faulty logic]

I find it sad to watch these businesses fail. I worked at blockbuster for five years, and that came spending a few years at hollywood. They were fun, and one of those great starter jobs for students. Now they are dieing, and they're slowly killing movie theaters. Advancement of technechology is robbing so many from jobs.

[EG.]

I hope movie rental stores, the physical stores you can walk into and pick out a movie never die.

Its one of the great things. Go down to the store and pick up a movie, not go to the tv and pick one out or go to a small box outside of a 711 and get one.