Blockbuster Inc. has been fighting major loss in its movie rentals for quite some time. The battle could very well come to an abrupt end for this movie rental company.
Blockbuster has been struggling to avoid claiming for bankruptcy protection as they are faced with major competition such as Netflix Inc and Redbox. Blockbuster quoted via press release on Thursday their second quarter net loss has widened. They claimed to a new forbearance with debt holders. Their hope is to give themselves more time to recapitalize. How successful will it be? Not quite sure. Considering the last time I went to Blockbuster, prices seemed to have increased. Not good especially when the competition is tearing into the profits.
The quarterly net loss was extended to $69 million from the $37 million last year. Revenue dropped from $982 million to $788 million within a year. A whole 20 percent elapsed in that quarter. With substantial losses from company-operated stores closing to newer stores bringing in lower revenue, it has forced Blockbuster to continue to revamp their image amongst this fierce combat. Apart of this revamp strategy, they have created a service with Comcast to offer DVDs and video games by mail. Sounds quite familiar, doesn’t it?
It looks like Blockbuster might be facing major concerns rather quickly as this agreement is effective until September 30. Unless they do a major overhaul, they might be forced into an unfortunate bankruptcy. For the sake of those employed there, I hope they reorganize and regain the glory they once had.