Blockbuster to Close All Remaining U.S. Stores

Blockbuster to Close all Stores
Justin Sullivan/Getty Images

Dish Network bought Blockbuster in 2011 for $320 million; around 300 stores will close by the end of January 2014

Bye-bye Blockbuster: Dish Network said Wednesday it will close all of the video rental chain’s remaining U.S. stores, as well as its DVD-by-mail business by early next year.

Dish, which bought Blockbuster in 2011 for $320 million, attributed the move to more consumers switching to digital alternatives to rent or stream movies, while kiosk operators like Redbox also have played a considerable role in Blockbuster’s demise.

Dish also said it continues to stand behind the brand, which it sees as an opportunity to grow its VOD business among Dish’s more than 14 million satellite TV subscribers.

“This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” said Joseph P. Clayton, Dish president and CEO. “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 currently operates around 300 Blockbuster stores. In an unusual move, stores that operate as licensed franchises will be able to remain open and operate under the Blockbuster name.

An estimated 2,800 jobs will be affected as part of the store closures, the company said.

The Blockbuster By Mail service will end in December.

Dish will now focus on promoting the Blockbuster brand to customers through Blockbuster@Home, a service that streams movies and TV shows to TVs and mobile devices. Starz, EPIX, Sony Movie Channel and Hallmark Movie Channel are among its content partners.

SEE ALSO: Redbox Now Controls More than 50% of Home Video Disc Rental Biz

Dish’s decision to shutter Blockbuster’s stores comes as movie rentals from such retail outlets continues to decline dramatically, and marks the end of an era for a once dominant brand founded in 1985 and reliable source of revenue for Hollywood’s studios.

During the third quarter, revenue from such rentals fell 14.5% to $245 million, according to the Digital Entertainment Group, the industry org which tracks the homevideo biz. This year, physical rentals from stores are down 13.2% to $767 million. Blockbuster had been the dominant player in that sector, with its closest rival Hollywood Video having shuttered years earlier.

Compare that to rentals from kiosks, which earned $472 million during the third quarter, up 3.8% and $1.4 billion for the year so far, a decline of nearly 1.3%. Subscription-based streaming services like Netflix saw revenue rise 33% during the third quarter to earn $815 million and $2.3 billion so far in 2013, up 32%, the DEG said.

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  1. ex-employee says:

    As an ex-management employee of Blockbuster, I informed upper management several years ago, why the decline in sales. As technology advances and consumers can purchase movies from the comfort of their home, as pirating increases and the Red Box introduction, sales would continue to decline. While upper management laughed and ignored my comments to the sales issues. Are you willing to listen now????

  2. meinerHeld says:

    Oh the tears of nostalgic pity for the once-mighty Blockbuster! The part that tugged at my heartstrings most was when that Dish Network CEO or whoever said something about “we expect to leverage that brand.” Such love, such Blockbuster, such pity! Waaaaaaaaaaaaah!!!

  3. Frank W says:

    So the monster monopoly of Wayne Huizenga gets its comuppence. Buying its competitors and purposely putting a store in a location served by a Mom & Pop, effectively killing it. Amazing how quick the death was in Florida and its home town after a simple little thing like iTunes and video streaming started. My local Blockbuster is now a furniture store. Wayne’s desire to get into the CD music business is what really started it’s death because he didn’t understand it. He bought out a more superior company that sold music and rented movies, Sound Warehouse, and gutted what made it work, the employees that knew the music but were of the “edgy” kind with long hair and piercings (tattoos weren’t such a fad then) Wayne’s first step after rebranding the stores as Blockbuster Music was to institute a dress code that disallowed such edginess and in effect, cut out the heart and soul of a mixed business that worked–employees who knew their stuff.

    So Wayne’s child is finally dead, but he got out with his millions and his name is now “honoured” because he now has a school of business named after him.

  4. Mojo says:

    Poor Blockbuster

  5. Ian Berkshire says:

    If I could only close down a billion dollar a year business because I didn’t make enough money!!!!

  6. liz says:

    Maybe if blockbuster didn’t charge $3.99 for one day rentals… and for each day it’s late… they may have survived. … too greedy.
    And not connecting the streaminf with actual store rentals was a dumb move…. I would have staued a customer if they connected the services… they made it difficult and redundant.

  7. Bill says:

    Pity everything DISH delivers via satellite is horribly over compressed and if 2:35:1 or 2:39:1, is pan & scanned to 16:9.

    Like original aspect ratio or high quality, non-macro blocking video? You silly elitist.

  8. Tommy D. says:

    Blockbuster was once the beloved go-to place for video movie fun night but since I’ve been able to buy 3 Tom Hanks movies for $5 (Burbs, Money Pit and Dragnet on one disk.), it’s clear this is the right decision albeit late. I’ll never forget the look, feel and smell of a Blockbuster store and looking forward to it’s reincarnation.

  9. Jared says:

    They passed their debt onto the Canadian branch, and forced then to close and now in the end they are all closing. Here in Canada we were still a profitable company. Dish Network never should have boughten them if they didn’t really want to manage them. Without video stores and actual physical product there is no brand.

  10. Joe Smart says:

    Why did Dish but Blockbuster in the first place when they clearly had no interest in trying to run the business? Immediately after they bought Blockbuster all of the Chicago stores except two were closed and all of the rental kiosks were sold to Redbox. I really don’t understand the logic behind any of this.

    • Bill says:

      @joe smart to make money.. you buy a giant company for $320 million and break it up.. then sell off the pieces.. bit by bit until its all gone.. then keep anything that costs pennies to run but still makes a profit..

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