Blockbuster files for U.S. bankruptcy protection

[radiofan]

Blockbuster files for U.S. bankruptcy protection
Canadian operations not affected
Last Updated: Thursday, September 23, 2010 | 8:26 AM ET
CBC News

Video-rental chain Blockbuster Inc. filed for bankruptcy protection in the United States on Thursday, as the company moved to refinance and cut its debt load.

In a filing with U.S. Bankruptcy Court in the Southern District of New York, the company said it has struck a deal with its bondholders for a refinancing plan.

The company's Canadian operations said they are not affected by the move.

Blockbuster Canada issued a statement stating it operates independently of the U.S. operations and is financially stable.

"We have the assets and cash flow to execute our business plan," said Barry Guest, Blockbuster Canada's vice-president and general manager.

Blockbuster Canada has 440 stores across the country and about 5,000 employees.

Blockbuster Inc. said its U.S. operations, including 3,000 stores, DVD vending kiosks, and mail and digital businesses, will all remain open during the reorganization.

Blockbuster has lost market share as more consumers turn to the internet for their entertainment.

Blockbuster's plan is to cut its debt from nearly $1 billion US to about $100 million or less via a debt-for-equity swap with bondholders that hold about 80.1 per cent of the company's senior notes.

"After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customers," said Blockbuster Inc. CEO Jim Keyes.


Read more: http://www.cbc.ca/world/story/2010/09/2 ... z10MRbFJt0

http://www.cbc.ca/world/story/2010/09/2 ... ction.html

[Howaboutthat]

Rental chains in Canada had better change their business models, or they will be next. Does anyone still go to a store to rent?

Netflix launches Canadian plan
By REUTERS

Netflix launched an online-streaming service in Canada for movies and TV shows Wednesday, its first foray outside the United States.

Adding another content provider to a congested market, Netflix said it will offer unlimited streaming of movies, documentaries and TV shows for $7.99 a month.

Canadian consumers will be able to stream video instantly on their TVs and computers. Leading video game consoles, such as the Nintendo Wii, the Sony PlayStation, and devices such as the iPhone and the iPad can all stream from Netflix in Canada.


Netflix said it has inked licensing agreements with studios including Lionsgate, MGM, Sony, 20th Century Fox and Canadian distributors Alliance Films, Maple Pictures, eOne, and Mongrel.

"With our launch today in Canada, Netflix is focused on adding meaningfully to the entertainment choices available to Canadian consumers," company co-founder and chief executive Reed Hastings in a statement.

Netflix's entry into Canada represents another challenge to the country's established telecom and cable-TV companies as they fight for viewers. It will also be streaming over networks of Internet providers that may offer similar services.

Canada has seen convergence in its telecom, Internet and broadcasting sectors in recent years as once-dominant regional telephone carriers compete nationally against cable companies such as Rogers Communications and smaller Internet service providers.

[hagopian]

Signed for free one month at Netflix.ca = and then noted that Canada is stuck with a B movie version of the American offering.

Lots of the best titles are NOT available in Canada. Think this was a preemptive strike against Apple TV, or whatever, because this is NOT like the REAL version of Netflix.

Just a warning that for every good title, there is a ton of obscure garbage that no one has ever heard of.

Maybe too early to say netflix.ca is going to be a killer, but for sure the delivery method spells the end of video rentals.

[Marathon]

Signed for free one month at Netflix.ca = and then noted that Canada is stuck with a B movie version of the American offering.

Lots of the best titles are NOT available in Canada. Think this was a preemptive strike against Apple TV, or whatever, because this is NOT like the REAL version of Netflix.

Just a warning that for every good title, there is a ton of obscure garbage that no one has ever heard of.

Maybe too early to say netflix.ca is going to be a killer, but for sure the delivery method spells the end of video rentals.

I agree 100% the selection is crap at the moment

[drmusic]

What I haven't seen mentioned in any of the articles yet is that back in April the US company put up the Canadian stores as collateral, so that the studios would continue to sell them movies. The studios have first lien on the Canadian chain now.

http://consumerist.com/2010/04/blockbuster-uses-canadian-stores-as-collateral-to-make-deal-with-fox-sony.html

[Russ_Byth]

Once a U.S. company files, its only a matter of time before its subsidiaries elsewhere go the same route.

[drmusic]

Once a U.S. company files, its only a matter of time before its subsidiaries elsewhere go the same route.

Yup. Two words: Movie Gallery

[jon]

Once a U.S. company files, its only a matter of time before its subsidiaries elsewhere go the same route.

In better economic times, from time to time, you will see someone come along and save a Canadian subsidiary. Without the "easy money" of a few years back, that just isn't happening now. Best recent example was Linens & Things where the Canadian subsidiary made a tidy little profit each year, thanks to some of its U.S. competitors not existing here in Canada. But they (all LNT locations) are all gone now, on both sides of the border now.

Sad, but it happens a lot where you get corporations with multiple lines of business or who own chains in multiple countries. My favourite example is the Western Canada company that owned Cheesecake Cafe, Ed's & Fred's, Maxwell Taylor's and McCormick's. They did everything right on the restaurant side, making good money at it, but were sunk in the early 1990s because they had speculated in commercial real estate beyond their restaurant locations. Less than 15% (chains/locations) survived the transition to new ownership.

[Buckley]

Maybe too early to say netflix.ca is going to be a killer, but for sure the delivery method spells the end of video rentals.

Well, that said though, many people that would want to use Netflix effectively will definitely have to upgrade their internet packages. For example, Rogers offers a 15gb a month cap for its cheaper internet subscription. That means your "unlimited streaming" from Netflix will probably fill your cap within about 15 movies, or 30 half-hour episodes of TV, or whatever (yes I'm aware that it's not exactly a gig per video, though if we're talking High Def it could easily be less movies that way).

I think this is something people won't think about... will it be worth it to have to spend $30 more a month on internet for those who are only currently paying for cheap internet packages, on top of the Netflix subscription? I currently already have the 95GB package so I'd be fine, but not everyone does. I can only imagine the poor souls suckered into one of those "Rocket Sticks" (Buy one and get a brand new laptop for only $100 from Best Buy! What a deal right?!) that are capped at like 5gb trying to use Netflix. They'll be over their cap in a day.

Also, since big screen TVs have become the norm (when I was younger, only the rich people had them, now I really don't know anyone who doesn't own at least a 37" screen, I picked up a 42" TV for $700 last year), do people want to sit and watch a movie on a 20" computer screen (or smaller)? Yes, I'm well aware you can hook a computer up to your TV (assuming the computer has the correct outputs) but this isn't a well-advertised feature of computers for the masses, you have to buy separate cables and adapters, depending on how elaborate your AV setup is, you'll have to put some effort into it all... so, I don't know that video rental will die completely. I think actually this could be a good thing for the convenience stores or smaller shops. Blockbuster as a giant will not be able to sustain itself, whereas a convenience store that sells so many other things will be just fine. I could see Blockbuster maybe partnering up with EB Games/Gamestop or HMV or something (one purchases the other), with video rentals being only a small part of the business and an afterthought to the rest of the business (actually selling games and DVDs). I think we're still years away (if it ever happens) from digital distribution fully taking over, even the younger people I know still like the idea of having something physical or tangible.

[jon]

I took a look at NetFlix.ca when it came out a few days ago with its free first month trial, but I won't use it. And it has nothing to do with the content. But it is all about the delivery.

For me, it would be the ability to download and burn a (Standard Definition) DVD on my computer, that I could then watch on my TV. Rather than this streaming nonsense.

I can, however, see the majority of Canadian households using it now or soon, given the number of Wii, PS3, XBOX, iPad, iPhone, Internet-connected Blu-Ray DVD players and Internet-connected HD TV's in homes. All are or will soon be supported by NetFlix as a way to watch a movie on your television set., as opposed to your puny little computer monitor.

[Aaron]

I was all set to subscribe until I saw the selection.

My partner and I don't watch a lot of TV, and rely on OTA for News/Jeopardy and the networks' streaming for our Stewart/Colbert/30Rock/HGTV fix.

Netfilx would have been a good compliment to that, but there's almost nothing we want to watch, and almost zero availability in Canada of the Roku box we'd need to stream to theTV.

[Howaboutthat]

Perhaps someone can tell me the fascination with 30 Rock.

I've watched it 3 times. I WANT to like it, but I just don't find it funny or interesting.

[Aaron]

Humour's such a personal thing. If it doesn't work for you, you can't make it.

[radiofan]

Humour's such a personal thing. If it doesn't work for you, you can't make it.

What a great quote for sandclan's "Old Jokes Home" !

[Steve Sanderson]

Humour's such a personal thing. If it doesn't work for you, you can't make it.

What a great quote for sandclan's "Old Jokes Home" !

HA!HA!....Funny guy!
Works for me!