Deathwatch: Blockbuster

Blockbuster has gone to the top of my list of home entertainment companies that may not be around a year from now. It has already closed more than 500 of its 7,000 stores (including our neighborhood store), and could close another 300 or more this year. It posted a net loss of $558 million for 2009, on a 20% fall in revenues. The company plans to roll out Blockbuster Express kiosks in place of the staffed storefronts, but they face stiff competition from redbox DVD rental kiosks. Blockbuster also is working on its mail and streaming rental systems, but is going up against the 8oo pound Netflix gorilla in that corner of the market.

It looks as though Blockbuster is set to follow Movie Gallery and countless small neighborhood rental shops into that final fade-to-black. There probably is still room for a new competitor to get into the game, but Blockbuster is saddled with about $1 billion of debt and it looks unlikely that it will be able to climb out of that hole.