As expected, Bloomberg reports that Blockbuster filed for Bankruptcy protection this morning.
Blockbuster Inc., the world’s biggest movie-rental company, filed for bankruptcy after failing to adapt its storefront model to online technology pioneered by rivals such as Netflix Inc.
The company listed assets of $1.02 billion against debt of $1.46 billion on a Chapter 11 petition filed today in U.S. Bankruptcy Court in New York. The company said it reached a deal with a group of bondholders on a plan of reorganization and secured a $125 million loan to finance operations.
After the dust clears, Blockbuster will only have $125 million in debt.
Blockbuster issued a press release stating that the stores, kiosks and online service would operate as normal during the proceedings, and they would still honor gift cards, store credits and Blockbuster Rewards.
This is just a polite way of saying as of today BB is on life support.
Posted by: Hiedi | September 23, 2010 at 11:29 AM
make sure you rewind those tapes before you turn the lights out, blockbuster.
signed
kharma
Posted by: things | September 23, 2010 at 12:00 PM
Looks like giving the greedy movie studios more money not to have the 28 day window paid off for them. Good riddance Blockbuster.
Posted by: slider121 | September 23, 2010 at 12:38 PM
Cramer held up a HUGE Netflix envelope yesterday on his show and made some comment about Netflix destroying BB. Funny stuff.
Posted by: Bob Emmerich | September 23, 2010 at 12:41 PM
Too bad. We need alternatives to Redbox and Netflix. Even with these two companies dominating the market, there are still a lot of customers to reach.
Posted by: Matt | September 23, 2010 at 12:41 PM
CEO Keyes shouldn't have mocked me. Some great turnaround artist.
Posted by: Corey3rd | September 23, 2010 at 01:23 PM
@ Matt
Apple TV and Amazon VOD
Posted by: things | September 23, 2010 at 01:45 PM
@things: I'm thinking another type of "brick-and-mortar" store. Of course, nothing on the scale of Blockbuster, but similar to Redbox. I think there are a lot of ways the Redbox business model can be improved and a competitor could step in to capitalize on them.
Posted by: Matt | September 23, 2010 at 01:52 PM
@ Matt
Oh I see what you mean. I can tell you tho, after using streams so muhc (legally like roku) I barely bother with DVD's anymore. I've had The Road sitting collecting dust for awhile.
I do think the future is streaming altho I recognize that me and people who use this site are the early adopters of course.
Posted by: things | September 23, 2010 at 05:10 PM
Chapter 11 is re-organization. The debts will be discharged or restructured and BB will emerge in better shape, in theory.
Chapter 7 is liquidation.
Posted by: TheDamnGuy | September 23, 2010 at 07:27 PM
Before everyone starts planning the demise of Blockbuster, let us remember that KMart filed for ch. 11 several years ago, restructured, and made enough profit a few years later to buy out Sears. Anything is possible!
Posted by: Ryan | September 24, 2010 at 02:42 AM
This brings tears of joy to my eyes. BB really went out of their way to earn my ire back when I was a customer.
Posted by: rorqualmaru | September 24, 2010 at 03:16 PM
@Ryan
What's K-mart?
Seriously the two K-marts in my area are gone.
Well one left shortly after the area got a Wal-Mart and the next closest K-mart stayed opened but was a ghost town.
Been to the Sears closest in my area a few times. It's like a ghost town too....
Another sad thing is local businesses in my town and the town next to it are a joke in prices compared to the big chains. Sadly. I never or rarely cruise downtown and rarely shop at the stores. Which again they are like empty too.
Posted by: Whoa. Like whoa! | February 23, 2011 at 03:09 AM