Blockbuster Getting Blocked

February 25th, 2010. Published under Uncategorized.

Blockbuster, that massive company which controlled the video renting industry for so long, is having a hard time in the recession. With Netflix and Redbox, as well as Internet pirating and the proliferation of move channels, biting into their share of the market, Blockbuster has experienced a severe decline in sales recently. Of course, the recession has not helped.

Blockbuster Inc., the largest U.S. movie-rental chain, will close at least 500 U.S. stores and is exploring ways to restructure debt.

Blockbuster is working with Rothschild Inc. on financing and strategy, the Dallas-based company said today in a statement. The company has total debt of $963.9 million, including leases, according to the statement.

The company closed 253 stores in January as more consumers turned to Coinstar Inc.’s Redbox movie vending machines, and mail-order and online rental services such as Netflix Inc.

It should come as no surprise that Blockbuster is struggling to keep its market share–Netflix and Redbox have provided more convenient and cheaper models for business. Blockbuster will have to find a way to keep up, or be relegated to the dustbin of business history.