The final curtain is falling on about 300 Blockbuster locations scattered around the US, meaning the once dominant video-rental store chain will have just 50 franchised stores remaining open in the country.
The remaining Blockbuster video-rental stores that Dish Network Corp runs in the US will be closed by early January and as part of Dish Network’s retreat, Blockbuster’s DVD-by-mail service is also shutting down next month.
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.
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 most ubiquitous retailers in the US with 9,100 stores.
Blockbuster also operates in other countries such as the UK, Australia, Brazil and Mexico.
About 2,800 people who work in Blockbuster’s stores and DVD distribution centers will lose their jobs, Dish Network said.
“This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” Dish Network chief executive Joseph Clayton said in a statement on Wednesday.
The shift has been a boon for Netflix Inc, which 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 US$20 billion.
However, 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 US$234 million in 2011 and then tried to mount a challenge to Netflix, but the Colorado satellite-TV provider could not wring a profit from Blockbuster either, prompting even more store closures.
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 US$35 million on revenue of US$1.1 billion last year and posted an operating loss of US$4 million during the first half of this year, according to regulatory filings.