Blockbuster Files For Bankruptcy

Dallas-based Blockbuster Inc. filed for Chapter 11 bankruptcy protection yesterday, calling into question the futures of over 5,600 stores worldwide. The company will be evaluating each location on a case-by-case basis, and seeks to cut costs after reporting a $558 million net loss last year. Newsweek credits the company's slow adoption of new media distribution methods as a big reason for the company's decline. "... while Blockbuster discussed creating its own subscription service to rival Netflix, it wasn't until August 2004 that its online DVD rental program actually started in the US. And when, in 2004, Coinstar entered the market with its Redbox DVD kiosks, Blockbuster didn't begin installing similar devices until 2008." CNET suggests that "Leaders of pay TV services might be wise to start doing the business equivalent of digging foxholes and manning the battlements or the same thing could happen to them."

Comments

I'll miss them

[beschra]

Browsing in a browser just doesn't hold up to browsing the physical media. Guess I'm just a library kinda guy.

Re:I'll miss them

[E IS mC(Square)]

Browsing in a browser beats browsing physical media when it contains 100000 times more choices and not only crappy hollywood 'blockbusters'. Guess I am a picky kinda guy.

Re:I'll miss them

[MistrBlank]

And conveniently these days you can borrow movies from most local libraries.... free.

Re:I'll miss them

[kg8484]

Guess I'm just a library kinda guy.

Then go to the library. I haven't needed Netflix nor Blockbuster for a good long time. My library is part of a rather large network of libraries. I can go to the library itself and browse available titles and I can also put a hold online for pretty much any movie I want. Yes, I have to wait a bit longer for recent releases compared to a pay service, but I'm patient and there are plenty of older good movies that have zero wait that you can watch in the interim. Now, if you live somewhere where there aren't any good libraries, well, I guess you are SOL. I've never had this problem, but I guess if you live in the boonies it affects you.

Re:I'll miss them

[nizo]

Neither Netflix nor Amazon should even exist, but for the stupidity of Blockbuster and Barnes and Noble. I can see the clueless management of both companies now:

"Oh that intertooob thingy will never catch on!"

Re:I'll miss them

[rotide]

I know people see the past through rose colored glasses, but I most certainly won't miss going in and finding that all the good/new movies are out of stock and the hassle of dealing with late fees for things I definitely returned on time. Oh, look at that, they found the copy I had out. Thanks for making me come down and threaten to drop my membership, AGAIN.

Re:I'll miss them

[Albanach]

It's an incredible strategy they're undertaking.

They don't have free streaming, so what separated their plans from Netflix was that you could exchange in store.

Here they closed all three local stores leaving over 100,000 people without a local Blockbuster. Overnight, their rent by post plans were more expensive than Netflix and more restrictive. They also appeared to be slowing down shipping movies, where they'd often be sent out the day after your return was received, rather than the same day.

Then they started rolling out kiosks, like RedBox. But if you have a mail in subscription, you can't use your free rental coupons in their kiosks and you can't do returns or exchanges to their kiosks.

They seem hell bent on destroying themselves, and that doesn't engender much sympathy.

Re:I'll miss them

[jlf278]

>>Maybe they will build their next brick-and-mortar store out of clue-by-fours.

Hey moron, there's no such thing as clue-by-fours. They're called 2"x4's! What an f'in dumb@$$. Could you be anymore clueless?

Re:I'll miss them

[FredFredrickson]

Don't forget their end of latefees-- which ended up the king of late fees. Apparently, if you kept the DVD, no late fees occurred, because they just charged your credit card for the purchase of the movie.. (I actually wrote about this in 2005.. End of Late Fees)

Or what about the "always in stock guarantee!" That was my favorite. Apparently, if the new release you were looking for wasn't in stock, they'd give you a little paper rain check that says "You can rent this dvd at a future date for exactly the same price it is today, no questions asked!" Which would be just awesome, except.. their prices didn't really change often.. It was the same as not getting a rain check at all. They didn't hold a copy for you or anything. It was a disingenuous marketing ploy.. each and every one of them.

Every time they changed something, it was an insult to their customers. My $17.99 3-dvd at a time account transformed one night to $24.99. I was a little peeved, but at the time, I was enjoying the number of discs I could rent. So then they upped it one more time (about a month later) to $34.99. I dropped it like it was hot. F-that. Netflix it is. They literally couldn't have done a worse job at customer retention. It was like they were chasing me off with a big stick.

Re:I'll miss them

[MMC Monster]

The other option is that if you don't have a good video complement at your local library, ask if they take donations.

Many will (baring porn), and maybe you can jumpstart the local library collection. I give many of my old movies to the library and encourage everyone else to do the same.

Re:I'll miss them

[DriveDog]

Yes, it's not as simple as just not adopting new technologies. BB has long had very obnoxious policies. The day Family Video opened nearby was the same day I never ventured into a BB again. I don't understand how BB killed the old neighborhood family-run video store, unless it was just that BB had more copies of the latest movies, but I do understand why BB closed the store not long after FV opened a block away. I can't say about other BB stores, but the appearance and general manner of the employees of the one here were terrible (and I'm a pretty tolerant person, so I'm sure that had a greater negative influence on many others). One might say that if you pay poorly that's what you get, but that doesn't work here, either, as employees of other stores that pay poorly at least have good attitudes towards customers and don't appear to have dirt falling from their bodies. This just reflects poor management. Oh yeah, and FV apparently vacuums the floor occasionally, unlike BB. FV may be in trouble, too, I don't know, and I don't go there much since getting Netflix and Dish, but at least they do what they've always done well. The worst policy of BB? Late fees, charged automatically to your credit card. FV charges a late fee upon return, for which you can get credit toward your next rental. They still make some money on late returns, but in a more customer-friendly way, and their business model isn't built on it. Does your public library charge late fees automatically to your credit card immediately after the due date? People weren't used to that, and didn't like it at all. It wasn't the cost, but the idea of it. The only bad things about this are the now completely unemployed and the vacant stores left behind.

Re:I'll miss them

[tooyoung]

I love my Netflix account, but I do find it difficult to make sure that I don't miss movies when they make it out to video. I tend to try to keep an eye out on the New Releases section of Netflix, but even that doesn't seem to work. The other day my friend mentioned he had rented McGruber, and I swear I never saw that listed as a new release for Netflix.

Netflix's new release section has a problem that I've observed on all other sites that list new releases: the big movies get thrown in the same jumbled mess of a page as all of the latest direct-to-DVD crap, yoga videos, and children's cartoon collections. Sure, I like stumbling upon new movies I haven't heard of, but a lot of the time I just want to see what big releases are making it to DVD. I've yet to find a decent site that ranks new releases by popularity. Any recommendations?

As much as I will always hate Blockbuster for charging me $250 late fees on single movies back in the day, there was something nice about walking the store and browsing the new releases. You could use the number of copies of a movie to point out the popular releases, and even if you had missed that a movie had come out several months ago, it would probably still be on the wall.

Re:I'll miss them

[commodore64_love]

One reason Blockbuster (and most rental stores) didn't like DVDs is because they'd come back scratched and eventually become unplayable. They preferred the longer life of the VHS tape, and therefore avoided DVDs as long as possible.

Re:I'll miss them

[AdamWeeden]

This post needs some perspective I think. Let me qualify my post by saying:

1) I am a former Blockbuster employee (5 years ago while I was in college).

2) I am a current Netflix subscriber and occasional Redbox user. I can not recall the last time I walked into a Blockbuster. I think their business model is archaic.
 

Don't forget their end of latefees-- which ended up the king of late fees. Apparently, if you kept the DVD, no late fees occurred, because they just charged your credit card for the purchase of the movie.

Which only occurred after you didn't return it for a week! Did you think they were just going to let you keep the movie forever?

Apparently, if the new release you were looking for wasn't in stock, they'd give you a little paper rain check that says "You can rent this dvd at a future date for exactly the same price it is today, no questions asked!" Which would be just awesome, except.. their prices didn't really change often.

Unless this changed since I worked there, this is out and out wrong. The rain check was for a FREE copy of that title on your next visit.

Re:I'll miss them

[dnahelicase]

It's not stupidity. They were already making megabucks each year with obligatory bonuses independent on how the company they supposed to manage is doing. It's not a capitalism, it's a parody on it.

Actually, it is stupid. They could have used those megabucks to wipe out any competition that started getting popular. They were lazy and stupid because they didn't understand or study their market or the way technology changes their market. If you don't adapt to changing market conditions and get ahead of the curve, you can't expect to stay on top.

Re:I'll miss them

[dnahelicase]

Why was Barnes and Noble stupid? I bought books from their website before I bought them from amazon.

You might have bought from B&N first, but it sounds like you bought from Amazon later on? B&N should have invested early to keep Amazon from getting huge. Back in 1997 Amazon.com was cheap! B&N was huge! Amazon started buying up other .com's, like CDNow, in order to grow their product lines to be more than just books. Amazon grew from nothing and became a giant while B&N was a giant and started struggling to survive, but they both were selling the same thing! B&N could have been the site we all go to, or Amazon could have been a subsidiary. They snatched defeat from the jaws of victory...

Re:I'll miss them

[Lumpy]

Sorry but a Clue by four does exist.

It's a 2"x4" with nails in the end you swing and hit people with.

Re:I'll miss them

[Sancho]

Don't forget their end of latefees-- which ended up the king of late fees. Apparently, if you kept the DVD, no late fees occurred, because they just charged your credit card for the purchase of the movie.

Which only occurred after you didn't return it for a week! Did you think they were just going to let you keep the movie forever?

I think you're misremembering this bit.

Blockbuster charged you a $1.25 restocking fee after 7 days. It wasn't the traditional late fee, which was based upon the number of days you were late, but no reasonable person is going to believe that that $1.25 isn't, in reality, a late fee.

They charged you the full price of the movie after 30 days--way more reasonable than 7, but still a nasty surprise for some people.

Unless this changed since I worked there, this is out and out wrong. The rain check was for a FREE copy of that title on your next visit.

You are correct. The GP has his head up his behind, or just has a hate-on for Blockbuster.

Re:I'll miss them

[tixxit]

You think that's bad. I live in Canada, a market that is far behind the states in terms of movie rental options. Blockbuster Canada should have seen their U.S. counterparts continual failure as an opportunity to invest in the streaming market in Canada. Instead they focused on their brick-n-mortar stores. Now Netflix has finally moved into Canada. It was good knowing you Blockbuster Canada.

good fail!

[Anonymous Coward]

blockbusters main source of revenue was late fees. all I can say is, goodbye blockbuster don't let the door hit you in the butt.

So sad, but it's time

[Pojut]

Goodbye, Blockbuster. With news of your bankruptcy (yes, I know they aren't technically closing all their stores...yet), a bit of my childhood is officially gone.

Tell me, fellow slashdotters: was there anything better when you were a kid than going to the video store on a friday night to rent a video game or movie? My brother and I rented COUNTLESS NES and SNES games from our local video store (Olney Video)...soooo many games. Good times, good times.

I recognize how convenient and better services like Netflix and Gamefly are, but there's just something about going into a dusty old video store and browsing the shelves that convenience will never replace.

Re:So sad, but it's time

[slim]

I recognize how convenient and better services like Netflix and Gamefly are, but there's just something about going into a dusty old video store and browsing the shelves that convenience will never replace.

If we're going on a nostalgia trip, I want to mention the properly dusty video rental shops that came before the glossy multinational chains stepped in. Thinking of those places gives me a Proustian rush into the 80s almost as much as retro arcade cabinets.

Re:So sad, but it's time

[lowrydr310]

Wasn't it Blockbuster who ran the mom and pop video rental stores out of business with their corporate muscle?

Speaking of Mom and Pop video stores, when my favorite local video store was steamrolled out of business by Blockbuster, he fired back (literally) by using half of his store to manufacture illegal fireworks! Every year near the end of June, the video store was packed with customers, until one day a manufacturing accident created a big explosion and a big fire. My brother was nearby when it went down, and said there were rockets flying through the streets, and saw the owner get carried out on a stretcher with lots of charred skin! He eventually recovered, and still makes the fireworks but in a different location.

Sadly this guy had one of the biggest collections of NES and SNES games I've ever seen, as well as a massive collection of 80s and 90s VHS pr0n that I never got to see (but always peeked behind the curtain to get a glimpse of the box covers); all was destroyed in the fire.

Re:So sad, but it's time

[voss]

Blockbuster was the biggest meanest dinosaur you ever saw...then the asteroid hit. Suddenly being the biggest and meanest didnt matter anymore. All
the big stores that enabled them to triumph over their rental rivals suddenly became disadvantages over their newer smaller smarter competitors.

Re:So sad, but it's time

[mcgrew]

Tell me, fellow slashdotters: was there anything better when you were a kid than going to the video store on a friday night to rent a video game or movie?

There were no videogames or movie rentals when I was a kid, kid. I spent my Friday nights at the drive-in theater (in fact I worked at one when I was a teenager). I spent a lot of time at the public library, and in my room with a slide rule and soldering gun.

I recognize how convenient and better services like Netflix and Gamefly are, but there's just something about going into a dusty old video store and browsing the shelves that convenience will never replace.

Netflix didn't kill Blockbuster, stupidity did. Here in Springfield the Blockbuster store closed down a year or two ago. They were stupid enough to open right across the street from Family Video and rent new releases for four bucks a day while FV rented them for $3 a week. BB rented older movies for $3 for 2 days while FV rented them for a buck a week.

Guess what? Family Video is still there, and a lot of FV stores are in town. AFAIK that was the only Blockbuster here.

Only an idiot opens a store across the street from the competetion and tries to charge higher prices for the same goods. Blockbuster is going bankrupt because their business model is almost as stupid as the record labels.

The Onion

[oldspewey]

Obligatory Onion reference

Time for them to throw in the towel

[MikeRT]

At this point, Blockbuster is so far behind its competitors that the only responsible choice is to liquidate its inventory, cut some severance checks and pass on the remaining cash as a distribution to shareholders.

We're not used to thinking like that, but Blockbuster has probably not a hope in Hell of actually holding its own at this point. Therefore it should do whatever it can to pass along its remaining value directly back to its shareholders before it squanders it on a vain attempt to beat very entrenched competitors who already have mindshare high ground with the public.

Re:Time for them to throw in the towel

[Maxo-Texas]

There also has to be a reason Netflix can get buy on $8.95 or $15.95 a month.

Lower salaries? Corporate offices in an inexpensive location? No corporate headquarters?

Older companies build up fixed costs over time. If they get big enough, they get the law changed to protect them. If they don't make that size, the die off.

I finally bit the bullet and signed up for netflix last night.

AMAZING.

Took under 10 minutes and I was watching "Pushing up Daisies" and then browse parts of several movies.

With my new blu ray player (still in the box) I should be able to watch these on my TV too.. .and on my iPhone.. and at my friend's house on their computer.

Amazing. Incentives for pirating drop waaaaay down when you get "all you can eat" for $8.95. Some stuff I'll have to wait to come in the mail.

Seems too good to last-- to good to be true.
At some point the people supplying netflix will raise their rates as they did on the cable tv providers.

But for now- nice.

Re:Time for them to throw in the towel

[CrankyFool]

Just a quick note -- Netflix does have a Corporate Headquarters. I know. I work there. It's very nice. And the salaries are well-known to be noticeably above-average. It's a kick-ass place to work.

I'm not spilling any corporate secrets when I note that analysts have acknowledged for a while that the lower Netflix drives its subscription plans, the harder it will be to compete with it. We started with a, what, $15.95 plan, I think? (I was a subscriber back in 2002). The lowest plan which offers unlimited streaming is $8.99/month now. Pretty sure you'll never see it go up.

This is what happens, when...

[Bill_the_Engineer]

You spend all your time focusing on the mom-n-pop's you're putting out of business, and don't look in the rearview mirror to see RedBox or Netflix.

Seriously, Blockbuster lost its karma when it used its size to ink deals with movie studios to stock their shelves on consignment with a percentage of the rental fee going to the studios. This allow BB to stock more movies, while the small local movie rental shops still had to purchase their DVDs at the ridiculously high rental shop price.

Re:This is what happens, when...

[interkin3tic]

You spend all your time focusing on the mom-n-pop's you're putting out of business, and don't look in the rearview mirror to see RedBox or Netflix.

Next on the chopping block: gamestop. They did the same thing. They also still have more stores than any reasonable person would think they would need, the result of merging with EB games and closing few redundant stores.

They've managed to hold their own in the face of competing with walmart etc, mostly through the used console game market. Many of their customers don't bat an eye at selling a game for $5 that someone else would buy for $25. Game developers are already moving in to try to block used game sales with one time use codes and digital content. I'd expect that next generation, most of the big titles will not be transferrable easily and gamestop will really take a hit.

In completely unrelated news

[andy1307]

Netflix Nabs NBC Deal

NEW YORK (TheStreet) -- Netflix(NFLX) announced on Friday that it will expand its licensing agreement with NBC, allowing users to stream prior televisions series from its cable and broadcast networks.

Netflix subscribers will be able to watch series like Saturday Night Live, Friday Night Lights, Monk and Battlestar Galactica, the company said.

Netflix has been working over the last several months to expand its streaming content, first through a partnership with EPIX, a joint venture between Viacom(VIA), Metro-Goldwyn-Mayer Studios and Lions Gate Entertainment(LFG) that could add up to 20,000 new titles to Netflix's streaming content.

Meh, dinosaurs died out too

[sizzzzlerz]

One more greedy corporation who muscled out the small, neighborhood stores and when they finally became the big kid on the block, squeezed their customers for everything they could. Now, in the light of new technology they're unable to control, they become unable to compete. So be it.

In the words of airline stewardesses everywhere: B'bye!

Re:Meh, dinosaurs died out too

[careysub]

One more greedy corporation who muscled out the small, neighborhood stores and when they finally became the big kid on the block, squeezed their customers for everything they could. Now, in the light of new technology they're unable to control, they become unable to compete. So be it.

In the words of airline stewardesses everywhere: B'bye!

Indeed. My "venal Blockbuster" story are the sheets of prepaid rental coupons that were suitable for "gift giving". My wife bought some sheets of these to give me as a birthday gift - which I used a few times, and then discovered that they had "expired"! These were not some sort of promotional freebies, not even some sort of discount deal, they were full price pre-paid rentals! And in tiny print on the back of the coupons (not evident in any of their gift promotions) I discovered that they were only good for six months. Having advance use of our money for free, and the bonus possibility that I might lose or forget about them and thus never redeem all of them (common with gift cards) was not good enough for their profit margins - they had to convert a sale into a theft. I didn't use Blockbuster much after that - a great strategy for building your consumer loyalty.

Re:I Won't

[LordKronos]

Getting hit with late return fees just doesn't hold up to on demand streaming of tens of thousands of titles. Guess I'm just not a Luddite.

You say this like the late fee is a required part of the rental experience. I've rented a lot of movies over the last 20 years, and never once have I had a late fee. How hard is it to return something on time? Apparently pretty hard, based one how many people get them, but I just don't understand it.

Witness a rare defense of Blockbuster

[elrous0]

I know it's hip to romanticize Mom & Pop stores over the big evil corporation, but I would like to offer an alternative viewpoint on this one. Does Blockbuster stock mostly crap (i.e. the latest CGI-fests/the latest Adam Sandler movies/etc.)? You bet. But, you know what, all my Mom & Pop's shelved crap almost *exclusively* before Blockbuster came along in the 90's. Blockbuster was actually a godsend to my neighborhood because they stocked a pretty decent selection of indie and lesser-known movies. They may not have had 100 copies of "Ghost Dog," or "Memento" or "Sling Blade," but at least they had a FEW copies. My local Mom & Pop's didn't have ANY of these movies (before Blockbuster and Netflix, there was no way for me to see these movies without buying them). Blockbuster ran my local rental stores out of business for one very good reason, because they were a lot BETTER (no bullying necessary).

Now, when Netflix came along I went over to them (because they offered an even better selection and didn't censor NC-17's like Blockbuster). But for a long time in the 90's, Blockbuster was the best store out there for film fans in a LOT of neighborhoods and even whole cities. Blockbuster was the only place to go for smaller films, unless you were one of the fortunate few to have a nearby Mom & Pop that catered to indie fans (and those were pretty rare in the cities I lived in, and usually only found near big college campuses and in artier neighborhoods).

So I'll actually miss them. And I also worry that Netflix might now leverage this to jack up their prices and introduce other heavy-handed customer treatment (since they pretty much have a monopoly now on physical rentals).

Re:Good

[russotto]

I'm giving you serious advice here. It is not healthy to stock up on anger like that. Take yoga classes. Really, I'm fucking serious.

Yoga? Yoga's not going to help. It gives you way too much time to put your body in uncomfortable positions and _think_ about all the ways various bastards wronged you. Like that damned yoga teacher who suckered you into dislocating your own hip.

Re:CEO and Investors

[RevWaldo]

"This is all your fault!" cried the CEO at the press conference, pointing his finger at the crowd. "We asked you, begged you to rewind, but you wouldn't, you just wouldn't, I... " His voice trailed off, then his eyes rolled back as he collapsed onto the podium, then into a heap on the stage, the toppled-over mics blasting everyone's ears with feedback, then falling silent.

.

Cable not going anywhere w/o viable alternative

[stewbacca]

I don't agree with the last part of the summary saying the cable companies are going the same way as Blockbuster.

The cable companies MIGHT go the same was as Blockbuster if the cable companies had a serious competitor like RedBox or Netflix. As far as I can tell, there is no alternative (especially for niche interests like mine...soccer, racing, BBC). Sure you can get tv content from online sources, but can I watch Texas vs. UCLA this weekend without a cable subscription? How about Oregon vs. Arizona State? What about the Singapore Grand Prix? How about some English Premiere League soccer or the CONCACAF matches?

And even if I could get this content that I want on-demand, cheaply and easily, how do I get it to my TV with surround sound? So far none of the alternatives has solved this issue for me.

Re:I Won't

[h4rr4r]

Who charges overage fee? I have TWC and even those assholes don't stoop to that level.

Re:Bailout!

[stewbacca]

Don't let facts get in your way. The $700 billion bailout was a Bush policy.

http://articles.cnn.com/2008-09-24/politics/bush.bailout_1_bailout-proposal-rescue-plan-mortgage-related-securities?_s=PM:POLITICS

Re:I Won't

[LordKronos]

there's no connection between "I saw a movie last night" and "I must return the movie"

Wow, you can't even remember for 24 hours (or 2 days, or however long your rental is)? I don't know what to say. Perhaps I'd just suggest that, when you're done watching, instead of throwing the movie on top of your entertainment center or somewhere out of the way, perhaps you can set it with your car keys or something, so that it's very obvious to you. I expect your response will probably be "no thanks, I'd just prefer not to rent movies instead", but if you have that much trouble remembering things, then just take it as general advice.

I'm sure you can be anal about it and never get a late fee, but I'd rather have not go through that effort just to watch a damn movie.

Anal? WTF? You say that like I sit there all day saying "gotta return that movie, gotta return that movie", post notes all over the house reminding me, and have a daily checklist with an item labeled "returned rentals (if applicable)". Is it anal that I remember to put on pants before leaving the house, too?

Re:I Won't

[FatAlb3rt]

As bandwidth shrinks in the US

Huh, didn't know that was happening. My connection speeds have been getting faster... for the last 15 years.