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Friday, September 24, 2010

Blockbusted

Blockbuster filed for Chapter 11 bankruptcy protection yesterday.  Chapter 11 does not necessarily mean the chain's going out of business.  It's an opportunity to re-organize and shed some debt.

A key to this is Chapter 11 gives Blockbuster a chance to get out from under store leases.  Blockbuster currently has about 3,000 stores.  The New York Times reports that number will shrink to between 1,000 and 1,500 in the near future.  Chances are, that store near you won't be around much longer.

While it's sad to see any business struggle, you have to face the fact that Blockbuster has simply become obsolete.  You can get movies on line, in the mail, through cable or satellite, and from vending machines.  Blockbuster does have some vending machines, but it waited too long to get in the game.  Too little.  Too late.  Too bad for the people who work there.

I can't say I've ever been in one.  I'm not a renter of movies.

As we have seen in the past, the success rate for businesses that spent time in Chapter 11 isn't very good.  It will be interesting to see if the people in charge can change the company enough to compete with all the others in 2010 and beyond.

While all this new technology, and the speed at which it is emerging, is fascinating to those of us in the media, it's frightening at the same time.