Blockbuster plans to close an additional 525 to 600 stores in 2010 and beyond, adding to the 950 stores that are expected to close next year, Wedbush Morgan Securities analyst Michael Pachter noted.
The movie rental service has faced increased pressure from Netflix, Redbox and similar services, which has drastically reduced the amount of foot traffic the store brings in each quarter. As the number of competitors continues to flood into the movie sector, each new company seems to chip away at Blockbuster's profitability even more, despite the company's recent attempts to make changes.
The company's financial issues are well known, as Blockbuster recently posted a $114.1 million loss, a significant increase from the $17.8 million loss during the same quarter last year.
I still visit my local Blockbuster to look for cheap DVDs and Blu-ray movies to purchase, but very rarely rent movies from the store. Blockbuster is attempting to revamp its movie business structure from the ground up, but it may be a bit too late for the company, as its competitors continue to grow stronger.
The Blockbuster Express kiosks, with more than 10,000 expected to be introduced through 2010, may be the company's last significant hope to compete with Netflix, Redbox, and other competing services.
Furthermore, Wal-Mart and other retailers offering $10 new-release DVDs have also severely cut into Blockbuster's bottom line.
Over the next few years, it should be interesting to see if Blockbuster is able to compete with rental kiosks, online rental, streaming movies, and $10 new-release movies.
