Blockbuster to File Chapter 11

From themovieblog.com - click on link below post to visit site for complete story.

 

I predicted the fall of Blockbuster before 2010 lets out, but it looks like they are making a final push to save their company. This week it is expected that Blockbuster will file for Chapter 11 by the end of this week in an effort to rebuild and come back from this debt.

Hollywood Reporter shares:

Video rental giant Blockbuster is expected to file for Chapter 11 bankruptcy protection as early as today, the Wall Street Journal reported Wednesday, citing sources.

Investor Carl Icahn, who owns about a third of the firm’s senior debt, is playing a key role. He has led the charge to free Blockbuster of debt and will either return to the company’s board himself or designate a representative, the paper said.

Are brick and mortar video rental stores even an option for the future of media delivery?

With their main competitors being Netflix and Rogers, both steering away from physical movie rentals and opting for mail-in or online digital delivery, I predict that companies like Blockbuster just don’t stand a chance.

Blockbuster did dive into the mail-in option with the advantage that you could return those movies to a brick and mortar store for faster turn around, but when Netflix started offering online content delivery, the gloves were off.

Now remember, Chapter 11 Bankruptcy is a protection plan, not actual financial failure. This allows them a window to ignore their bills while they reorganize and build a strategy to pay them off.

But is there a way out for a service industry so rapidly changing? Has the competition already squashed out any hope of competition from the once massive Blockbuster chain?

View the original article here

Blockbuster Canada is not Part of Blockbuster’s Chapter 11

 

This will be the first of a series of posts that I am publishing that explores the current market of Movie Rentals and how some of the changes to the market affect how and where we get our movies.

After hearing the news that Blockbuster would be filing Chapter 11 Bankruptcy, I was put in touch with with Barry Guest, Vice President and General Manager of Blockbuster Canada, and he had some great news to share about Blockbuster. Well, great news for his side of the business anyways.

It appears that amidst the official filing of Voluntary Chapter 11 (protection against bankruptcy for the reorganization and revitalization of the company) that Blockbuster Canada is not named among their assets, and would remain functioning as the separate entitiy that it is.

TMB: We heard yesterday that Blockbuster was filing for Chapter 11, and it appears that here in Canada, you are not.

BG: Yes, that was filed and confirmed this morning that the US had filed Voluntary Chapter 11 and that the legal filing excludes Blockbuster Canada. We are a different company, we have our own assets and cashflow to maintain our business and to deliver our business objectives and strategies.

TMB: Was the current situation something that Blockbuster US could have avoided?

BG: I cannot comment on the US and how they run their business. I can comment that the Canadian is quite different. “By Mail” services haven’t taken hold here the way they did in the US. We have had a very solid growth plan over the past years and have over 440 stores coast to coast. [We] still maintain a positive market share and are growing that market share in the industry.

TMB: Netflix is now offering direct streaming content to Canada? How does this affect Blockbuster Canada?

BG: Netflix announced yesterday, and I think that competition is a good thing. They have not launched “By Mail” subscription and that’s what their business was founded on in the US. They also are offering older content, and older content on new devices will be interesting to see how that performs. There is some unclarity on facebook and twitter about volume you stream and service [provider] you have will maybe bring additional costs to you as a consumer.

From Blockbuster Canada’s perspective it would make sense for us to evolve into different channels of distribution. That’s not an announcement.

The recaptolization of our US parent will only help us get to broader strategies here in the future.

TMB: So, not an announcement but more of a “something you may be looking at”?

BG: Absoultely. And not because of the filing, and not because of Netflix. We have been looking at that for some time now.

TMB: Because it would make logical sense to keep up with the evolution of the industry and do what makes sense for the business as a whole?

BG: We will be formulating our own plan, and watching the marketplace closely and digital content from everything that has been reported to us. Still the Canadian consumer gets most of its rental via hard goods through our stores across the country.

What do you think about Blockbuster reorganizing? Can they find a plan that works that serves the consumer?

View the original article here