Was it a victim of technological advances that provided cheap access to movie videos in the home, or was it poor management?
Blockbuster Canada has petitioned the courts for bankruptcy protection. Approximately 1400 Blockbuster jobs in Canada could be lost in the very near future. Job loss such as this can effect the economy tremendously. Families will need to revamp personal finances by turning to providers for financial advice and online loans in hopes to not fall short.
When Blockbuster US went bankrupt in September 2010, the Canadian Blockbuster company became the guarantor. As a result, when the American company collapsed, the Canadian company became liable.
On May 20, 2011, Blockbuster Canada told reporters that they would be seeking bankruptcy protection and would probably be closing 140 stores in Canada. This is an early estimate and is the first step in the eventual closing of all 400 stores.
Grant Thornton, have been granted the job of assuming control over the chain’s 400 stores and will begin the process of selling off the assets. This is common practice in the case of bankruptcies. Grant Thornton is a reputable company that specializes in handling bankrupt corporations and monitoring the sale of the company assets.
The current debt is listed as being in excess of 67 million. The now bankrupt Blockbuster became heavily indebted to major video providers such as Twentieth Century Fox, Warner Bros. and Sony which eventually resulted in the demise of Blockbuster Canada as well.
Blockbuster Video is yet another casualty of the fast moving world of technology and the bigger and more convenient movie providers such as Dish Network. If movies are provided in the home at a reasonable cost, people will turn away from the “go out and rent” mentality of getting a movie. It is all about convenience. However, it is surprising that Blockbuster did not see the signs earlier on and stop amassing such a huge debt.
Blockbuster’s bankruptcy should serve as a wake up call for other movie providers, such as pay TV. Why pay per movie when monthly subscriptions are available for unlimited viewing. The lesson here is that any service that makes life easier and more affordable for the majority of people will prosper. It is a brave new world out there and people are more than happy to go on line and research, or buy, or compare, or enroll in what ever they want. In other words, eliminate the middle man.
