On Monday, word got out that UK music retailer HMV had entered administration. Now, it seems another big name retailer is following in HMV's footsteps in the UK. Reuters reports that Deloitte has been appointed as an administrator. Deloitte said Wednesday that Blockbuster's stores would operate as normal while it tries to find a buyer for the company.
Thanks to digital distribution platforms, DVD rental companies like Blockbuster have had a hard time over the last five years. However, the last couple of years have been big ones for the video entertainment industry in the UK. Last year, streaming giant Netflix entered the UK market, which was already populated by a number of sizable players including Amazon's LoveFilm, 4oD, and BBC's iPlayer. Indeed, the allure of renting or streaming digital content as opposed to schlepping down to the shops is hard to resist.
Blockbuster officially filed for bankruptcy in the United States in September of 2010. The company submitted a filing for Chapter 11 bankruptcy, requesting protection against its almost $1 billion worth of debt while it tried to figure out a restructuring solution. In April of 2011, the company’s assets were purchased by Dish Network in a $320 million bankruptcy court auction. After adjustments for available cash and inventory, the price Dish paid ended up being around $228 million.
Blockbuster employs more than 4,000 people in the UK across 528 stores.
Its like the CEOs purposefully run their companies into as much debt as possible before they close the doors so everyone suffers! Thanks for making the economy so sh1t guys.
If they jumped into the video streaming train when the technology became widely available, it's likely they would be where Netflix is standing now.
Actually, money IS debt.
The problem arising here is that businesses like these go under because they couldn't adapt to new technology that made this obsolete.
We can automate 75% of the global workforce with the technology in circulation tomorrow if we so wish.
The only sector remaining where most of the global workforce currently works in, is in the service industry (and that is being increasingly challenged by automation).
Since Capitalism relies on cost efficiency, it will continue to implement automation because its becoming faster/easier/cheaper to automate something than to wait for a Human to be trained (who will require breaks, health insurance, pension, sick-days, etc.) - this trend is only accelerating.
So those projecting that 'new' jobs will just suddenly appear might be making non-viable projections, because Humans as a workforce/manual labor have been an outdated concept for decades - its just that technology takes time to become 'cheap' in our fictional monetary based economy enough to be implemented (and the rate at which prices of technology is becoming cheaper is accelerating - far faster than what Humans can adapt).
Humans as a workforce is out dated in our first world backyards. But in other countries that blur the line or are third world, it's like robotics and automation is less reliable (and more expensive) than the good old fashion Human. Then again, Foxconn keeps talking about how they are 'upgrading' to using robots.
back in the vhs day, vhs to rent out cost 80-150$
im not sure if that over price happned with games and dvds but that is one clue, block buster has what, a few 1000 discs per store, and they got what, 100+ of the newest blockbuster that comes out, and how many of those discs really return their value?
you also have to imagine the property value, and the taxes on that, or even rending fee for them...
even stores that are in the red and never hit black serve a pourpose when you are a major player, it keeps brand awareness, and that is more valueble than the money the store would have had if they didnt shut down.
but blockbuster #$^%@ away all its brand name with late fees that were the real bread and butter for the store. they could have just charged you for another rental, but no, more than the cost of the movie as a late fee.
also a 6-12$ price point for renting out videogames... seriously...
block buster could have been a redbox/netflix like company.
have small store where someone comes in, tells you the movie they want, and you get it from the back.
and all the day, they send you movies and mailing addresses close to you so you also pack and mail out movies at the end of the day.
there, just came up with a buisness model that would kick blockbusters butt even back in the day when they were big.
but what really hurts them is that they still till they closed, got exclusivity deals for movies. rent it before you can buy it, or rent it from us, because no one else can yet kind of bs.