Wednesday, September 22, 2010

The Impact of Chapter 11 Bankruptcy for Blockbuster Video

In preparation for the movie Wall Street: Money Never Sleeps, my father wanted to see the Oliver Stone's 1987 original.

My dad asks me "How would I rent a copy to watch Wall Street. Would I just go to blockbuster and rent it?"

The video store used to be the movie lovers mecca, and now it's just one of many film delivery mediums, and Blockbuster became the big-daddy of corporate video stores wiping out most the completion.

The Associated Press reports that Blockbuster has a crucial interest payment due September 30, 2010. If missed, 900 million dollars in debt would be due in full.

The expectation that Blockbuster will soon file Chapter 11 Bankruptcy has led to it's stock price (BBI) dropping to 2.5 cents (it's stock symbol BBI had been delisted from the New York Stock Exchange in July).

Over the past couple years, Blockbuster's "store closing signs" have become common, and with 5000 more stores left, the bankruptcy will certainly leave a void in the video rental market.

In 2009 I asked "Will Blockbuster Survive? Should it?" and even provided survival suggestions, but it lasted into 2010 the company has continued to be in a decline, and it's hard to imagine Blockbuster having a successful reorganization in Chapter 11 BK.

Renting Wall Street
Yet, if it wasn't for Blockbuster, how would my dad have gotten his hands on an older film, 1987's Wall Street this past week?

It wasn't on the video-on-demand service with the cable company.

Redbox didn't have it, since it's not a new release.

My dad doesn't subscribe to Netflix, but of course they have it there.

He could buy it, but he's more interested in watching it once then creating a DVD library.

The local library has a copy, but there was already 12 people on the waiting list.

Blockbuster had it, and my dad rented a film there for the first time in what I assume had been some time.

It would appear that a lot of people would have to rent Wall Street in the next 24 hours to make that crucial interest payment, and probably far more people renting it then they even have copies in there system.

Blockbuster, can't say that I love you, but have to wonder what happens without you. There was a time where you got a regular stream of money from my wallet, but like many others I've moved on, and it looks like you will be moving on to.

Photo by RC of StrangeCultureBlog.


cathy b. said...

moving on too
their system

Anonymous said...

I saw a Blockbuster kiosk at a grocery store the other day - it even had old films (not new releases) in there, but obviously a limited library of them. It was the first BB kiosk I had ever seen.