Blockbuster is Dead!

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The once glorious Blockubuster – on of the largest rental and streaming content providers applied for a bankruptcy as a press release stated on the 29-th of August. Blockbuster issued a warning for all its Hollywood partners that bankruptcy is imminent – as early as the middle of September it will cease to exist.

What is the reason? The bank debt of 1 billion dollars is a just reason for bankruptcy. Such high debt is a surprise, given the fact that Blockbuster’s main rival – Netflix declared net profit of also 1 billion dollars for 2009, and is readying to pay the same amount of money to Eplix for exclusive rights on some movies.

Blockbuster will shut down its remaining 800 stores, following the closure of another 1000 earlier this year.

Many wonder what lead to such problems when the market is open for the new “Movie on demand” service? Well, the management of Blockbuster failed to follow tendencies on home video market, and this lead to problems, first slowing in the development, and then, the loss of 69 million dollars for the second quarter of 2010 and being delisted from the NY stock exchange companies list. The way was down for the last few years, and this end was expected and predicted by many experts during 2010.

Now the way is open for the big race of Netflix and RedBox to start, for the very attractive piece of the market left by Blockbuster, and for the entirely new niche of streaming content providing. A battle of already big companies to get bigger – trying to reach the size of Microsoft, Apple and Google.


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