New York Times
POSTED: 03:33 a.m. HST, Nov 07, 2013
LAST UPDATED: 05:45 a.m. HST, Nov 07, 2013
Blockbuster, which had more than 9,000 retail stores across America just nine years ago, is closing the few hundred video-rental stores that it still has, the company's owner, Dish Network, said Wednesday in a bittersweet but long-expected announcement.
Dish, which acquired Blockbuster through a bankruptcy auction in 2011, after the retailer had already been crushed by digital video distributors like Netflix, said it still saw value in the brand name and would use it in limited ways. But it will close all Blockbuster locations — it says there are about 300 left — and the distribution centers that support its DVD-by-mail service, which is also being dismantled.
The announcement amounted to a surrender: A statement that Netflix, symbolized by its little red envelopes and more recently its streaming service, had prevailed over the little blue boxes that Blockbuster VHS tapes and DVDs came in.
"This is not an easy decision," Joseph P. Clayton, the chief executive of Dish, said in a statement, "yet consumer demand is clearly moving to digital distribution of video entertainment."
Clayton added, "Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings."
Dish still operates "Blockbuster@Home," a streaming film service for its satellite television subscribers, and "Blockbuster On Demand," a competitor to the iTunes Store. Dish said it would hold onto the rights it owns for streaming content.
When Dish took over Blockbuster in 2011, the company had about 1,700 stores, but many of them were closed shortly thereafter. After the remaining stores are closed, there will still be a handful left, because about 50 Blockbuster locations in the United States are owned by third-party franchisees and thus are not affected by Dish's decision.