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A First Take on Blockbuster

posted by Stephen Lubben

Here.  In addition to my thoughts posted on Dealbook, I note that New York continues to consolidate its position as the home for big chapter 11 cases, taking back a role it once almost conceded to Delaware.

Comments

Blockbuster is so far behind the curve on technology that it's difficult to believe that they confirmation won't be followed by further treatment under the Code.

Blockbuster has a lot of ground to regain. Movie delivery is rapidly moving past physical media: Netflix streams movies through game consoles, on demand is convenient (hello Boardwalk Empire), and Apple is reemphasizing its Apple TV service.

Doing an unscientific survey of myself, I watch at least one movie per week and will be watching AMC or HBO series on demand until A Game of Thrones finishes its season in mid-June. I haven't been inside a Blockbuster since 2005, when I signed up for Netflix. My memory of Blockbuster is of surly clerks charging me a late fee for bringing a movie in 15 minutes late.

Basically, Blockbuster wants to recapture all of the customers that it lost to Netflix, without offering anything that differentiates it from Netflix. At the same time, it has a layer overhead from bricks and mortar stores and retail employees that Netflix doesn't. DIP funding is nice, but it doesn't change the underlying business problems that make a Blockbuster reorganization unfeasible.

Is the full post up at the Times? I didn't catch the NY/Delaware point. A good one. I went back to the post and looked again. Still didn't see it.

I liked Hollywood Video, where you could drop in and rent a new release or an older classic on a whim without planning several days in advance, as with Netflix. Hollywood Video closed suddenly without even any notice to its own employees. They arrived one day to find the stores locked. There was not even a sale of inventory upon bankruptcy as there often is: apparently Hollywood Video did not choose to file for bankruptcy but instead was forced into bankruptcy by its creditors -- a much rarer circumstance in the USA.

Not everyone has an advanced enough personal computer or TV set to view DVD-quality movies. And of course "DVD quality" itself is much lower quality than you would see in the movie theater itself.

@Mossup
I, too, preferred Hollywood Video to Blockbuster and the "modern" competitors. I've been underwhelmed by the selection at the on-line services I've checked out. As for the bankruptcy, Hollywood filed Chapter 11, but it became apparent no liquidation was possible, and it converted. The inventory was collected at a few stores for liquidation, and then "poof." Yet more dark space in a lot of strip malls.

I remembered the good old days when people would make fun of me when I have those "blockbuster nights". It used to be quite an event for a lot of people, because the way that blockbuster stores are, they entice you to do all your entertainment shopping there. You used to be able to get your movie night goodies like popcorn and candies. I guess if these companies don't keep up with the technology and the needs of the consumers, they eventually get phased out quite expeditiously.

I agree with you David, Blockbuster wants to recapture all of the customers that it lost to Netflix, without offering anything that differentiates it from Netflix.

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