Blockbuster to file Chapter 11 within days

[AJ Collector]

Well I guess I will be able to fill the holes in my DVD collection as they exit stage left.....

[saildog]

I liked them for a VERY short window when they rented everything but new releases for $1 for 5 days. For about a year I was renting 5 to 10 movies per weekend and catching up on everything I wanted to see.

This March, I went in and snatched up 10 movies on a cold weekend and when I got to the register the total came to over $40. I was expecting it to be about $10. When I asked, "What???" I was told, "Everything in the store is now just $4 to rent including new releases!".

Quite a business model and it shows that they really wanted to fail. (I left the movies on the counter and haven't been back since.) You'd think they would rather rent 10 for $10 than 0 for $0.

[SeattleEd]

But it could be... There's still a good chunk of people who would rather do a face to face transaction and walk around the video store for way too long.

Jim, my friend.

I cordially disagree on that sentiment. I can't speak for the country let alone my city where I live. However, based on the numbers and request that I've seen at work with regard to the VOD, it appears that many of our top clients, including Comcast, Disney, Redbox and some other overseas companies are requesting more digital content.
We are now getting movie trailers for films not yet in theatres from Disney that are aimed for the home market, meaning DVD, Blu-Ray and Download. They too are pushing download as well. They are making sure to cover all bases with sales. Not surprising.
Not to mention speaking with and over hearing conversations from many cinephiles and casual renters. This mostly from SIFF this past year and hearing how now digital is the way to go. The SIFF theatre now only screens in Digital. Also the Paul Allen owned theatre, the Cinerama, the second biggest screen in town, the first being IMAX, also screens in digital.
I would say about 95% of the people I know either do Netflix or VOD. Most of the people that do netflix NOW do streaming.
In the words of Bill Gates, whom I'm not fan of, made clear years back that discs will no longer be viable in the market for users.

"The format that’s under discussion right now, HD versus Blu-ray, that’s simply the last physical format we’ll ever have.

Even videos in the future will either be on a disk in your pocket or over the Internet and therefore far more convenient for you.”

This is back in 2005 at a speech in Howard University. We all know Blu-Ray won that war because of marketing but overall it seems VOD is creating headway and although older gen folks may not agree or like it, the fact of the matter is the teens and 20 somethings are the next wave of consumers and they have wholeheartedly embraced this philosophy.
As I stated in other discussions, I prefer a store since I grew up with walk in store mentality but seems that convenience is becoming more important to me as is will all my friends. DVRs and VODs just makes it easier to manage media and disseminate, or "share".

Blockbuster didn't think ahead so they just dug their own grave. They could have taken over with VOD if they only were smart. They test marketed Seattle in the Belltown area which is yuppie part of downtown, back in 2001.
But of course biffed it with high costs so they abandoned the entire idea and decided to refocus resources on better subscription service to compete against Netflix for the immediate short term win.
I worked for Encoding.com which became Loudeye.com and we were the only company in the world that did encoding for all clients. We had every client in the early years. EVERY ONE. You name it and Martin Tobias, the founder even went in on trying to convince people that VOD will be the wave of the future, of course he was biased and wanted his business to grow, but he had a point and vision.
Based on being in the digital media industry now for 12 years and seeing how the market is evolving in Seattle and other cities, I foresee VOD and other digital media deployment services being a mainstay. More so since the cost for data pipeline and storage has significantly dropped in recent times.

Sorry for being long winded.

[SeattleEd]

On an added note, not sure if you folks know that Comcast is working with Blockbuster in conjunction with covering both Disc subscription service and VOD. This was as of last month so I wouldn't be surprised if Comcast absorbs Blockbuster.

[BOTZWANA]

Well I don't rent movies at all! I buy DVD's at the grocery store. I have a huge collection now which I watch over and over. I believe renting movies is throwing money in the trash can. If I watch a rented movie twice it pays for itself if I buy it. If I hate the movie, I just sell it in my cafe. Mexico doesn't do downloading yet. Most are poor that would rather buy a DVD.

[SeattleEd]

Mexico doesn't do downloading yet.

I guess it depends on where you are. My sister is in San Luis Potosi and was in Guadalajara and according to her, streaming is available. She mentioned that in DF the hotels have VOD service, of course only certain hotels.
But yes, discs are still prevalent.

[Lonestarhobbies]

Duece Blockbuster..... I certainly will miss the golden age of renting....walking in and renting countless NES and SNES games to play as a kid. Thanks to you Blockbuster, you jacked your prices up, and I bailed on you and began building my own movie and game library

[domino]

Good riddance, I always hated Blockbuster. Wont miss them one bit.

[ODBJBG]

But it could be... There's still a good chunk of people who would rather do a face to face transaction and walk around the video store for way too long. I'm one of 'em.

I like the Redbox mainly because of cost and the fact that there really isn't alot of stuff coming out these days that I'm just dying to see. One down side though is I feel really stupid standing in line at a Redbox just to return a movie. For me I'll probably go the NetFlix route.

NetFlix is the best option out there. Nothing else is comparable. I do like my local video store and I still hit them up on weekends when I don't have something from Netflix.

My gripe with Redbox is that they're no better than Blockbuster in terms of selection, in fact, they're worse. You have about 30 new DVDs, 5 kids DVDs and 2 "classic" selections. We stopped in to rent a Redbox one night and had to wait outside in the 100 degree heat in a LINE behind four or five other people who all took a few mins selecting their video. As I stood out in the heat for 20 minutes I said to the other people, "we traded our video stores for this?"

The ones that are inside are okay, but many are in places that close. I'm curious to see how these things hold up in winter and how people will react to standing in the cold to return a movie or rent one.

The only reason people use Redbox is because they're cheap. $1 to rent a movie is a good deal to most folks. This is particularly popular in urban areas where VOD is decades away from being a reality.

I liked them for a VERY short window when they rented everything but new releases for $1 for 5 days. For about a year I was renting 5 to 10 movies per weekend and catching up on everything I wanted to see.

This March, I went in and snatched up 10 movies on a cold weekend and when I got to the register the total came to over $40. I was expecting it to be about $10. When I asked, "What???" I was told, "Everything in the store is now just $4 to rent including new releases!".

Quite a business model and it shows that they really wanted to fail.

Aside from limited selection, this was Blockbuster's biggest problem. Once they cornered the market on videos, they opted to hike their prices. They made every video a flat rate. Which sounds good on the surface, but in reality when I tried to rent 1989 Batman, they wanted to charge me $6. I said, this movie came out in 1989, it's 2008. Why am I paying as much to rent this as I am for a new movie?

It was stupid. I stopped going after that.

Thankfully there are still video stores around, but I fear that Redbox will kill the video store prematurely. Thankfully, so long as Netflix stays the bees-knees, we'll all be okay.

Hooray for NetFlix!

[torgospizza]

Well I don't rent movies at all! I buy DVD's at the grocery store.

I'm pretty much the same, except I wait a few months after release and pick them up at Best Buy for $5. Like the new Clash of the Titans (f.ex.), but not enough to pay $20? Just wait a few months.

[palitoy]

This doesn't affect Canada, they are profitable here. Netlfix isn't big here yet and zip never took hold.

[SeattleEd]

Curious to see the outcome.
Speculation of Chap 11. Could be ploy to drive the stock down so that another company could buy them out or bail them out (Comcast?)
Regardless they won't be going anywhere anytime soon with the new deal they signed last month.
Comcast has the pipeline while BB has the deals with production companies.
Yup, interesting times.

[Mikey]

I give Blockbuster 1 credit, their mail order service had MORE classic TV choices than Netflix - specifically I got Banacek through Blockbuster when Netflix didn't carry it.

[Adam West]

I have been through Chapter 11 with a previous company. It is sickening as an employee to witness. Usually huge golden parachutes are handed out to the executives who drove the company into bankruptcy. Massive layoffs and lot's of empty promises to the remaining employees. The lawyers are at the top of the list of creditors and everyone else falls below them. The company can basically pick and choose which contracts they want to honor and which ones they don't want to honor. A colleague of mine was given a rentention bonus prior to the bankruptcy. He was flying from North Carolina to Maryland every week. His job was being eliminated but they wanted him to transfer his knowledge and as an incentive offered a big bonus at the end of it. After the date, the CFO pleaded with him to stay on board a bit longer to help with the transition (which he did)...the company filed for Chapter 11 and then decided they were not going to pay the retention bonus to him since they could get out of any contract after the filing. Meanwhile the CFO who ran the company into the ground walked away with millions in his pocket.

[jwyblejr]

My gripe with Redbox is that they're no better than Blockbuster in terms of selection, in fact, they're worse. You have about 30 new DVDs, 5 kids DVDs and 2 "classic" selections. We stopped in to rent a Redbox one night and had to wait outside in the 100 degree heat in a LINE behind four or five other people who all took a few mins selecting their video. As I stood out in the heat for 20 minutes I said to the other people, "we traded our video stores for this?"

The ones that are inside are okay, but many are in places that close. I'm curious to see how these things hold up in winter and how people will react to standing in the cold to return a movie or rent one.

The only reason people use Redbox is because they're cheap. $1 to rent a movie is a good deal to most folks. This is particularly popular in urban areas where VOD is decades away from being a reality.

Doesn't your Wal-Mart have them inside? I'm starting to see more and more of them pop up there.