Blockbuster Bankruptcy Woes
I haven’t been to a Blockbuster in years. Not because I have some kind of personal vendetta against them or anything like that, but rather there are other closer video rental spots to my apartment and I’m not picky about who I get my videos from so long as they play properly.
It seems though, that in the years I’ve been gone, that the Blockbuster has been taking quite the pounding financially and in their last quarterly report released this month, the company states that it may be forced to seek bankruptcy protection. Losses for the last quarter topped the $490 million mark, an astounding total that resulted in part from the spin-off from former parent company Viacom, low in-store business that is being pinned on the elimination of late fees, and competition from online renters such as NetFlix.
Former Sugah Daddy Viacom is certainly rubbing salt in the wound with their attempts to acquire more online movie content. They’ve scooped up one of the more popular online video spots in iFilm, making it a part of their MTV unit.
In the “ouch, that’s ironic” category is the fact that Blockbuster actually passed up the chance to own NetFlix several times. NetFlix had approached Blockbuster with a buy out opportunity at $50 million, but the rental chain said no thank you, and instead signed a 20 yr video on demand contract with…wait for it…it’ll make you cringe…seriously…Enron. That’s right. We all know what happened to Enron, one of the biggest corporate scandals in history. The legal ramifications are still being sorted out, even years after the fact.
Oh and NetFlix? Now worth a cool $1.4 billion.
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