It was a dark day for Blockbuster Video when they filed for Chapter 11. The last few years have been incredibly tough for Blockbuster as they have been competing with online-video rental stores such as Netflix, Video on Demand and computer downloading. It has been reported that Blockbusters debt is approximately $1 billion. They are strategizing deals with senior stockholders to reduce the debt to a much more manageable $100 million. Blockbuster attempted unsuccessfully to introduce rental kiosks as a way of completing with online-rental services. The kiosk rental market is extremely competitive and has seen Redbox rise to the top, while Blockbusters and many other competitors trail behind. Blockbuster video needs to start focusing more on their online services as this is the way of the future. Owning stores costs rental money, maintenance fees, employee fees as well as many additional fees. An online service reduces theses costs and makes renting videos and games a much easier process for consumers. Due to the brand name Blockbuster has already made for itself, a well-made online service can save Blockbuster money as well as increase total profits made.
Work Cited: http://news.cnet.com/8301-13506_3-20017366-17.html