Print 71 comment(s) - last by callmeroy.. on Apr 30 at 10:41 AM

Blockbuster may have been busted by Netflix

For many years Blockbuster video enjoyed great success in the movie rental business. Blockbuster is one of the largest movie rental chains in the country, but the company has found that its continued existence is far from guaranteed.

Blockbuster has announced that there is "substantial doubt" about its ability to continue as a going concern. A going concern is a qualification that refers to an auditor's assessment of a company's ability to continue operations reports MSNBC.

Blockbuster is struggling with profitability and viability in the face of the rising popularity of mail-order rental services like Netflix the company stated in a SEC disclosure. Blockbuster had previously disclosed that an auditor was likely to raise doubts about its long-term viability.

Blockbuster stated last week that its revolving and term loan agreement had been amended giving the company a $250 million revolving loan for financing maturing on September 30, 2010. The company thinks it will be able to close the financing around May 11, but states that the closing of the loan is not assured at this point.

Blockbuster says that even if the loan is funded it, "may not have sufficient liquidity to finance the ongoing obligations of our business, which raises substantial doubt about our ability to continue as a going concern."

Blockbuster shares fell 3 cents to 85 cents in trading after hours after closing at 88 cents reports MSNBC. In July of 2008 Blockbuster was considering the purchase of now defunct Circuit City.  

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Simple Solution...
By cscpianoman on 4/7/2009 1:23:05 PM , Rating: 2
Close down all the stores and do what Netflix does, it is apparent where the market is going and they had better get on now while the getting is good. Also, work really hard to get a media streaming tool with new movies and you might be competitive.

RE: Simple Solution...
By Spivonious on 4/7/2009 1:34:46 PM , Rating: 3
They already offer a service like Netflix. I agree with you about closign the stores, but from my experience working there for a few years, LOTS of people rent movies every day over the summer. There were the regular third shift single guys, the regular housewives with young children, the regular Friday night teenager groups.

If you want a movie, and you want it now (and you don't have a way to hook your computer up to the TV) then there is no other option than to go rent one.

I think they should bring late fees back. They made up something like 40% of their revenue before they got rid of them. You just can't make that up in popcorn sales.

RE: Simple Solution...
By bbomb on 4/7/2009 3:02:55 PM , Rating: 2
Late fees have returned at the Blockbuster in our area. The Colony, TX

RE: Simple Solution...
By thequoth on 4/7/2009 5:22:57 PM , Rating: 2
What no one seems to have mentioned yet is that Blockbuster operates corporate stores and franchises. The corporate stores and the franchises (in my experience) are completely different and one of the differences is the late fee policy. Franchises pretty much do what they want. For example, the store in my area runs a rent 1 get 1 on Wednesday and they do charge late fees.

I have a Netflix subscription, buy movies from Best Buy, pay for premium movie channels on DirecTV, and every now and then I still rent a movie from Block Buster. There is a piece out there for everyone. Even having all this access to virtually any movie, sometimes I still cannot figure out what I want to watch.

I think blockbuster should focus on the thing that sets them apart form the online format like Netflix – real live people. Instead of paying any high school student $5/ hr to scan movies and take your money, employ pre-grad film students. Call them “movie guru’s” if you must, but let people know “if you have movie questions, we have movie answers”. Make going to rent a movie worth the trip.

RE: Simple Solution...
By Farva on 4/7/2009 5:31:52 PM , Rating: 3
I work at a Blockbuster (college job, not career move) and I can tell you that there are very few franchise Blockbusters anymore. BBV corporate bought out most franchises over the past few years. Also, late fees are soon going to return to all corporate Blockbusters, very soon. They were supposed to already be returned but BBV corporate can't decide on how to implement the change. Also there is going to be some new tiered rental arrangement (ie. 1, 3, 5, and month..yes, month rentals). This company is horribly ran from the C-level to the CSR level. No joke.

Luckily, I am graduating this May and have a real job, but I wouldn't hold by breath that BBV makes it more than a couple more years. They sent a mass email to all shift leads and store managers saying that their jobs were not in jeopardy and not to worry about the news. BTW, watch Clerks that is the attitude of most CSRs at Blockbuster.

RE: Simple Solution...
By Screwballl on 4/7/2009 10:09:09 PM , Rating: 2
I hope the local BB dies. They have screwed over so many people (including myself) saying they never returned a movie, tried charging them $40-100 for "movie plus late fees", and just all around bullshit.
The locally owned video store has better prices, has more movies in a smaller space, a real person actually calls you the next morning if a movie was not returned... instead of Blockbuster's crap automated system that never understands when you speak and doesn't recognize when you pressed "1", plus it refuses to work at all unless you call from the specific phone number registered under the Blockbuster account. Otherwise it just places you in a queue that will ring to the next available associate... yeah right I have been in that store and listened to the phone ring for 20 minutes before without a single person answering.

We refuse to go to Blockbuster anymore, Netflix or the locally owned store has what we need.

RE: Simple Solution...
By tlampen on 4/17/2009 11:47:36 AM , Rating: 2
Eff them for saying no late fees... at our BB store we don't have late fees but if you don't return the movie on time they charge you $40 to buy the movie and then you only get store credit when you return it. complete BS. I wish we had another local video store around but BB put them all out of business a few years back. another Sh!tty thing they are doing is effing their loyal customers by charging them for a "rewards" card. Friken make it free! Sh!t you not, the last time I went in to BB, their pitch to renew my rewards card was that the cost to renew was going to go up to $20 and I should renew it early because it is only $10 now! I hope they go out of business because they deserve it! Maybe it would allow a local Video store to come in and value their loyal customers as aposed to bending them over the counter!

RE: Simple Solution...
By FITCamaro on 4/7/2009 3:29:18 PM , Rating: 3
The only problem with streaming is that its future is also uncertain. If more companies adopt caps similar to the absurd caps at Time Warner (40GB maximum for $55/month) then no one is going to stream video.

RE: Simple Solution...
By Farva on 4/7/2009 5:33:48 PM , Rating: 1
Very true...I hope Comcast doesn't go down that dark road...I like my torrents. ;)

RE: Simple Solution...
By Boze on 4/7/2009 6:16:20 PM , Rating: 1
Comcast is already down that dark road. I got warned about 7 or 8 months back for downloading 461 GB in a single month. The tech said that "is way over normal home usage", to which I replied, "How do you define 'normal home usage' on a plan that is billeted as unlimited?"

The cap, by the way, after much pressing and speaking to several of his supervisors, is 250 gigabytes a month, download and upload combined.

The simple fact is... none of these companies should ever have said "unlimited" Internet in their plans. Once you tell the bodybuilder that the chicken breasts at the buffet are all you can eat, you're gonna piss him off when you decide that "all you can eat" means '3' and not '7'.

RE: Simple Solution...
By walk2k on 4/7/09, Rating: -1
RE: Simple Solution...
By Boze on 4/7/2009 6:54:40 PM , Rating: 4
Ironically, it was 100% legal.

It just so happens I was moving data between my online storage vault and a new computer I built... :)

OH, YOU LOOK LIKE A MORON NOW BECAUSE YOU ASSUMED, AND MADE AN ASS OUTTA YOURSELF. And me to a lesser degree, because now I have to let you know what an ass you are.

Now moving right along to the rest of your post...

I agree with you that 250 GB is very generous, and truth be told, according to Tomato, I haven't used more than 141 GB in a single month since the 461 GB month.

Fortunately, because cable is limited on speeds (6 mbps upstream / 15 mbps downstream is Comcast max in this area) and I live in a relatively small town (the lines are never... ever... saturated, you as a customer would never be impacted. I'm in the enviable position of having too big a pipe to realistically saturate to the point where it would affect another customer.

Also, how do you know what "unlimited" means unless its defined? They never said anything about no per-minute / per-hour / per-day / per-millenium charge. Unlimited can mean whatever I want it to mean, because it wasn't defined clearly at the start of the contract.

Had terms been clearly defined from the start, none of this mess would be occurring right now.

RE: Simple Solution...
By callmeroy on 4/8/09, Rating: -1
RE: Simple Solution...
By callmeroy on 4/8/2009 7:37:49 AM , Rating: 2
give anyone +1 point for the ability to read through the typos in that last post...sorry I'm off to a rough morning, didn't get much sleep and in earlier than normal today...

RE: Simple Solution...
By DFranch on 4/8/2009 12:50:14 PM , Rating: 2
I must have missed the typos, I understood everything which was said in the previous post. Unless you consider people disagreeing with you to be a typo. 461GB in a month is a lot of data, legitimate or not. I'll take my +1 now.

RE: Simple Solution...
By callmeroy on 4/30/2009 10:41:27 AM , Rating: 2
um kidding 461 a month is a lot...which is EXACTLY what i said...I'm completely confused on my rating on this

RE: Simple Solution...
By Hiawa23 on 4/8/2009 8:15:42 AM , Rating: 2
Thanks to Netflix's excellent service I have not even step foot into a Blockbuster in 5 or more years. It's clear where the market is going, so they should close the stores, & just continue with online rentals. Seems like things were great for Blockbuster years ago when they ad little competition.

"This is from the It's a science website." -- Rush Limbaugh
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