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Blockbuster To File For Bankruptcy In Us

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http://www.independent.co.uk/news/business/news/blockbuster-to-file-for-bankruptcy-in-us-2086996.html

Blockbuster, the DVD rental chain with 5,800 stores around the world, is expected to file for bankruptcy, marking another convulsion from the shift to online entertainment.

The company has $900m (£575m) of debt that it cannot pay because its revenues are tumbling and it is sliding further into the red, and a financial restructuring deal will wipe out shareholders and all but the most senior bondholders.

Blockbuster's fortunes have been sinking since the launch of rival services which allow users to order DVDs online and receive them through the post, such as Netflix in the US. The advent of online streaming of films, and video-on-demand cable services, plus movie downloads from stores such as iTunes, has dealt a further blow. Although Blockbuster has teamed up with Hollywood studios to launch services of its own in all these areas, it has been hobbled by the costs of its extensive store network, which spans 17 countries.

In the first six months of 2010, revenues declined 16 per cent, sending losses ballooning from $9.2m in the same period last year to $134m. For several months, the company has been operating only with the forbearance of its lenders.

Management and its advisers are believed to have agreed the shape of a restructuring deal, which will put the US company into Chapter 11 bankruptcy protection in the hope of continuing to operate a slimmed-down operation. Its UK stores are already a separate legal entity, and UK management have insisted a US bankruptcy would have "no operational impact on Blockbuster UK".

Blockbuster shut more than 500 stores in the first half of this year, with a target of almost 1,000 closures, and it is understood to have agreed to increase that total by at least a further 500. Senior bondholders – who include the corporate raider Carl Icahn – will convert some of their holdings into equity. Lower-ranking bondholders will be in effect wiped out.

Debt the way to wealth until that is you can no longer service the loans.

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Just a business model that has outlived its usefulness that used to be profitable and now isn't.

There's no special debt story here, I'm sure they used to make good money after paying interest.

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http://www.independent.co.uk/news/business/news/blockbuster-to-file-for-bankruptcy-in-us-2086996.html

Debt the way to wealth until that is you can no longer service the loans.

Bloody hell ive been waiting for this one for at least 5 years, i have to take my hat off to them, its remarkable how theyve lasted this long, claerly fighters to the last

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I haven't used Blockbuster since ..... 1995 :lol:. The writing was on the wall when DVDs, the internet, P2P, and YouTube arrived!

I remember seeing a branch a few months ago ... I could not believe they were still in business!

Edited by Home_To_Roost

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I am actually thinking of switching to Blockbusters online dvd rentals from lovefilm due to the dispute that lovefilm have with universal, which means that there are quite a few titles you cant rent from them. The current reviews seem to suggest that blockbuster offer a pretty good service. I have not yet moved to movie downloads, is the quality as good as a DVD? What the best way to do it, either legally or otherwise?

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I have not yet moved to movie downloads, is the quality as good as a DVD? What the best way to do it, either legally or otherwise?

+1

I would appreciate help, have not got a clue on the best way.

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I like going to my local blockbusters to rent films. Browsing an Internet catalogue is not the same as looking at the physical cases IMO, and also waiting for a film to be delivered is useless, because I rent them when I'm bored at home, and I prefer picking it up there and then, not waiting for royal mail to get the film to me.

I probably rent about 5-6 movies a month from them at the moment, and I'll be sad to see them go (if they do).

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+1

I would appreciate help, have not got a clue on the best way.

I wouldn't worry about getting 'the best' download arrangement. In terms of quality the non-HD downloads are pretty much of a muchness, roughly DVD quality. It's only HD where there are differences - as far as I know none of the (legal) download stores have anything as good as Blu-Ray. They do have 'HD' downloads but it will be the lower resolution 720p or 1080i version.

So: get a Blu-Ray player, e.g. a PS3, and download non-HD stuff from any number of stores:

'On-Demand' TV & Films: BT, Virgin, Sky etc.

'Download TV/Films' (roughly rental prices for a film): Playstation Store, XBox 360 'Zune', iTunes (Apple TV/Mac), other PC/Mac based service.

'Streaming TV/Films': iPlayer (PC, mobile, PS3, some TVs), 4oD, ITV, 5, etc. SkyPlayer on XBox 360 (see what they did there?), YouTube.

TBH there's only so much TV I can watch and too many services to choose from.

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As the internet destroys more and more "bricks and mortar" businesses I wonder if there's an opportunity to convert many of these empty premises into residential property. I for one wouldn't be too keen to live at street level on a busy road, but how else could they be used? Maybe it will simply mean an oversupply of commercial real estate, leading to a drop in rents, which will then lead to lower costs for the consumer, but this process will probably be a very long drawn out one - how do we speed it up? We want deflation now!

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It's not netflix or lovefilm that's killed blockbuster.

It's cable/satelitte TV on demand movies.

Consider NTL in the UK. £4 for the latest movies, you can pause and rewind like a tape, the quality is great... at least digital, possibly HD, and most notably you don't have to drive into town, find a parking space then wander into the shop *HOPING* they have what you want... and then go through the same to return it.

The biggest problem for physical dvd rental businesses is the demand ramp... most films have high demand straight after release, followed by a rapid tail-off... so blockbuster need 100 copies of the top films per store the first week, but only 30 the second week. After that they need to flog copies off to free up space.... but the upfront costs per disc make it VERY difficult to recover the initial purchase costs.

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As the internet destroys more and more "bricks and mortar" businesses I wonder if there's an opportunity to convert many of these empty premises into residential property. I for one wouldn't be too keen to live at street level on a busy road, but how else could they be used? Maybe it will simply mean an oversupply of commercial real estate, leading to a drop in rents, which will then lead to lower costs for the consumer, but this process will probably be a very long drawn out one - how do we speed it up? We want deflation now!

If the rents are low enough, any one of a number of businesses could fill the gap. The destruction of the high street is due to the ridiculous rent and rate demands placed on the shop, and the parasitic councils discouraging people from driving there with exorbitant parking charges and over zealous traffic wardens. The council help stick the boot in by allowing planning permission for soulless out of town shopping centres when joe public would never have a chance of securing planning permission on the site for a little self build house or something equally innocuous.

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Of the 4 nearest town centres to me, 3 of them have Blockbuster stores.

Going to be a load more empty units in the high street.

UK business not affected by this, so the charity shops will have to wait a bit longer for their next raft of outlets!

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UK business not affected by this, so the charity shops will have to wait a bit longer for their next raft of outlets!

I know it said US ... but we can't be far behind. If we're typical ... 10 years ago maybe hired a film a week. Now, it's once in a blue moon.

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Of the 4 nearest town centres to me, 3 of them have Blockbuster stores.

Going to be a load more empty units in the high street.

My local Blockbuster closed down about 2 years ago, and is now a Tesco Express.

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My local Blockbuster closed down about 2 years ago, and is now a Tesco Express.

The local one here in Ilford moved from the main drag a couple of years ago. A Sam99 is there now.

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You would have to rent a hell of a lot of movies just to cover the monthly rent. And tons of empty storefronts do not deter Britsh landlords from jacking up the rents yet again.

In the long run the whole high street will die. One I'm seeing more of is hairdressers, nail technicians, pedicure type businesses just out of peoples house. Talking to some of the ladies they said they can basically work half as much and make the same money without the rent and related costs.

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Just a business model that has outlived its usefulness that used to be profitable and now isn't.

There's no special debt story here, I'm sure they used to make good money after paying interest.

But it is another example of poor decision making by the lenders (banks). Shouldn't they have seen the death-spiralling business model that we all have and pulled the plug long ago when the debts could realistically be repaid? That way ordinary people (pension funds holding Blockbuster's debt and shares) would have at least walked away with some capital rather than none

The local one here in Ilford moved from the main drag a couple of years ago. A Sam99 is there now.

What's a Sam99?

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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