Well, that didn’t take very long, now did it?
Earlier this week we told you that it looked like Blockbuster was delusional about its future. We also told you there was a possibility the company might go into chapter 11 bankruptcy protection, or even chapter 7 liquidation. Well, according to The Los Angeles Times it is going to be the former.
Apparently executives from the struggling video rental chain have been holding meetings in Los Angeles with representatives from 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Walt Disney Studios and Warner Bros. to warn them that the company plans to file for bankruptcy in mid-Sept. The company is currently carrying $1 billion in debt and feels it will need five months of protection to get out from under that amount.
This is what is known as a “pre-planned” bankruptcy where a company attempts to get its largest creditors to agree to the terms of the filing before it is made official. By doing so, Blockbuster will be able to roll smoothly into the filing without having any unseen roadblocks cropping up that could delay the proceedings.
Apparently the company is trying to secure that it will continue to receive the all important shipments of new releases throughout the term of the bankruptcy, while also attempting to close 500 to 800 of its under performing locations. It currently has 3,425 stores remaining having already closed 1,000 of them through out the world.
Blockbuster is also talking with kiosk manufacturer NCR Corp., about deploying more company-branded DVD rental machines in addition to the 6,000 it has already rolled out. The machines rent discs for $1 a night, just like kiosk industry leader Rebbox does. It will also continue to attempt to expand its online presence to fend off the growth of Netflix’s Watch Instantly service.
Why does the saying about rearranging the deck chairs on the Titanic come to mind when I hear these plans? Instead of trying to be innovative and capturing customers in new ways, Blockbuster is playing catch up with companies that are already dominating their respective spaces. Why should anyone switch from Redbox kiosks to Blockbuster kiosks when they are virtually the same? As I described in the previous article, when it comes to Blockbuster’s online initiatives, they require you to download the movies as opposed to streaming them making it difficult to move between devices.
I have no desire to see the chain go out of business as it would mean thousands of people would lose their jobs, but they certainly are making it hard to root for them when they just seem to be trying to copy everyone else.
What say you? Does Blockbuster have any hope left? Do you even care?