Last month, MyCE broke the news that Dish was shutting down five Blockbuster shops in New Jersey. Turns out that was just the tip of the iceberg. By June, the company will close an additional 495 U.S. stores, leaving just 1,000 open.
At this rate, Blockbuster could become a fond memory – like the VHS tapes that helped build its empire – by next year.
During an earnings call this week, Dish Network CEO Joseph Clayton explained that the planned store closures stem from Blockbuster’s inability to turn a profit, inflexible landlords and the company’s greater plan to leverage the once-sterling brand name into existing services.
“For the third straight quarter, the [Blockbuster segment] was breakeven. And we have been very clear from the beginning that we would take action when necessary,” said Clayton. “Now our goal is to reach a steady-state store count so that we can leverage with our current pay-TV business and our future wireless enterprise similar to the way that we’ve incorporated Blockbuster @Homes, by mail and streaming services into our pay-TV business.”
Blockbuster filed for Chapter 11 bankruptcy protection in September 2010. Dish acquired the floundering rental business last April for $320 million.
News of the closures comes less than one year after Blockbuster President Michael Kelly proudly declared last summer that the company would continue operating its remaining 1,500 stores. In the weeks after the Dish buyout, court documents hinted that more than 1,000 stores would not see their leases renewed during the transition. Turns out the filings were eventually half right.
Compounding Blockbuster’s troubles, Redbox purchased 9,000 Blockbuster Express rental kiosks from NCR this month, effectively ending the company’s presence in that sector.
One last sliver of hope remains for the company: Blockbuster Movie Pass, which offers online streaming and by-mail rentals. Launched in October, the service is currently limited to Dish TV subscribers.
If Dish changes its tune and opens the package up to the general public, it could end up competing with a similar service from Redbox/Verizon. The pair announced they would deliver a Netflix competitor that offered instant video and kiosk rentals at one low price later this year. (via Home Media Magazine)