By Andria Cheng
Blockbuster, which once upon a time dominated the video-rental business, with more than 9,000 stores at its peak in 2004, is shutting its remaining 300 U.S. stores, cutting about 2,800 jobs.
Wow, as its commercial jingle trumpeted in the chain’s glory days, what a difference.
With the rise of $1 rental kiosks, video-on-demand and streaming video services offered by rivals including Netflix /quotes/zigman/87598/delayed /quotes/nls/nflx NFLX and Amazon /quotes/zigman/63011/delayed /quotes/nls/amzn AMZN , Blockbuster, bought out of bankruptcy by satellite TV company Dish Network Corp. in 2011, has fallen victim to its own incapacity to keep pace with evolving consumer tastes and behavior.
When Dish /quotes/zigman/109220/delayed /quotes/nls/dish DISH acquired Blockbuster, it still had 1,700 stores in the U.S.
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- Bloomberg
- Blockbuster location in New York shown in 2010.
Dish reported a second-quarter operating loss for its Blockbuster business, having said in August that the unit, with its drastically reduced number of stores, was close to being profitable. It also said the business was seasonal, with the strongest demand coming in the first and fourth quarters.
“This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” said Dish CEO Joseph Clayton.
The shutdown announcement Wednesday excludes 50 franchised stores in the U.S., spokesman John Hall said. The company said it also will end Blockbuster’s movies-by-mail service in mid-December.
Dish has divested itself of Blockbuster operations in the U.K. and in Scandinavia.
Dish said it will retain licensing rights to the Blockbuster brand, assets and library. It will focus on delivering the Blockbuster@Home service, which offers more than 15 movie channels and a movie and TV streaming service to its satellite customers. It also will continue to offer Blockbuster On Demand video streaming to the general public. It said it also will support Blockbuster’s franchise operations and agreements. It has 400 overseas franchised locations.
– Andria Cheng
– Follow her on Twitter @AndriaCheng