|Blockbuster May File for Chapter 11 Bankruptcy|
|Home Theater News Industry-Trade News|
|Written by Dick Ward|
|Friday, 19 March 2010|
In their annual finance report, Blockbuster stated that due to increased competition, there is “substantial doubt about our ability to continue as a going concern.” They also warned that they may have to file for bankruptcy to deal with the billion dollar debt they’ve accumulated after splitting from Viacom in 2004.
Blockbuster stated that, of course, Netflix and Redbox are part of the reason for recent losses. Blockbuster’s own kiosks are too few to make much of a difference yet and the mail order Blockbuster Online disc service just hasn’t made a profit. The bigger culprit, according to execs, is Video on Demand, which more customers are turning to.
It’s been announced that Blockbuster will be looking to cut $200,000 in overhead costs, and close 500 stores worldwide, after having closed 572 in 2009. Things are looking dire for Blockbuster, and other video rental companies who reacted slowly, if at all, to the changing consumer needs.