What’s the easiest way for a behemoth of a company, like Blockbuster, that seemingly owns its market segment to die? Being unwilling to change with the times. Note, I said unwilling, not unable. With the amount of money that Blockbuster was bringing in during the VHS-to-DVD transition, you’d think that they’d have better planned for the future—especially when Netflix arrived on the scene 13 years ago. Instead, the company was too brash and egotistical to realize that their business model would be in need of a major overhaul, and now they are paying for it. Today Blockbuster filed for bankruptcy. At this point, they don’t plan to shut down any stores or anything…but hey, Hollywood Video went bankrupt this past February, and a few months later, they shuttered operations completely. Just looking at what Blockbuster currently offers by way of online on-demand viewing, we wouldn’t be surprised (although we’d be saddened) if they were gone within 24 months.
What do you think? Any Blockbuster die-hards still around out there?
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Movie Gallery, the parent company for brick-and-mortar game retailer/renter (and one of the few remaining chain competitors to GameStop/EB) received an extension on its $900 million restructuring loan as it continues to struggle in an increasingly difficult market. Movie Gallery also owns Hollywood Video and and eponymous stores. CEO Joe Malugen said, “Despite the challenging market conditions for Movie Gallery and the entire rental industry, we are continuing to work with our lenders and our outside advisors to help address the Company’s current financial situation. We plan to continue to operate the Company without interruption as we work through this challenging period.”
So clearly the word of the day is “challenging” but the company seems to be angling toward an acquisition or merger to overcome those challenges. So far they have had to close stores and reduce staff to try and meet financial obligations, and this new extension has given them until August 27th before the loan is considered defaulted.