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Last Blockbuster stores in U.S. to close

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Associated Press
SAN FRANCISCO -- The final curtain is falling on the remaining Blockbuster video-rental stores that Dish Network Corp. runs in the U.S.
The closures announced Wednesday will affect about 300 Blockbuster locations scattered around the country. As part of Dish Network's retreat, Blockbuster's DVD-by-mail service is also shutting down next month.
About 2,800 people who work in Blockbuster's stores and DVD distribution centers will lose their jobs, according to Dish Network.
The cost-cutting measures culminate a Blockbuster downfall that began a decade ago with the rise of Netflix's DVD-by-mail service, followed by the introduction of a subscription service that streams video over high-speed Internet connections.
"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," Dish Network CEO Joseph Clayton said in a statement.
The shift has been a boon for Netflix Inc., which now boasts 31 million subscribers to its Internet video service and another 7.1 million DVD-by-mail customers. The company's success has minted Netflix with a market value of $20 billion.
But Blockbuster absorbed huge losses. It closed thousands of its stores before landing in bankruptcy court three years ago. Dish Network bought Blockbuster's remnants for about $234 million in 2011 and then tried to mount a challenge to Netflix.
But Dish Network couldn't wring a profit from Blockbuster either, prompting even more store closures.
The Englewood, Colo., satellite-TV provider had already closed about 500 Blockbuster stores this year. The latest closures, scheduled to be completed by early January, will leave the U.S. with just 50 Blockbuster stores operating under franchise agreements.
The chain's near extinction serves as another stark reminder of how quickly technology can reshape industries. Just a decade ago, Blockbuster reigned as one of the country's most ubiquitous retailers with 9,100 stores in the U.S.
Dish Network is trying to keep the Blockbuster brand alive through an Internet video-streaming service that rents movies and TV shows by title, for a set viewing time.
Blockbuster suffered an operating loss of $35 million on revenue of $1.1 billion last year and posted an operating loss of $4 million during the first half of this year, according to regulatory filings.
Story tags » Movies




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