Continued pressure from services like Netflix means that Blockbuster Video will be closing almost 1,000 stores all across the United States – more than double the amount previously planned.
Times have been tough for major video retail chain Blockbuster, and it isn’t just because of the recession, either. Two of the once-dominant chain’s competitors – mail-rental service Netflix and the Redbox kiosks found in convenience stores and markets worldwide – have sharply encroached on its territory, and the chain may be closing almost 1,000 stores all across the country by the end of 2010, reports Yahoo! Finance.
According to a regulatory filing Tuesday, Blockbuster expects to shut between 810 and 960 locations by the time next year wraps up, a number that would exceed more than one-fifth of its current U.S. shops.
That’s quite a step up, or back depending on your perspective, from Blockbuster’s previous plan, which anticipated 380 to 425 closings in that time frame. Here’s how the corporate office sees it: Blockbuster characterizes 35% of its stores as “core,” while saying 47%, or nearly half its total, are profitable, but still “non-core.” The remaining 18% aren’t turning a profit.
Though Blockbuster still took in $5.3 billion in revenue last year, that was a step back from $5.9 billion in 2005 – over the same period of time, Netflix saw its revenue swell from $682 million to $1.3 billion. This sizable increase was, no doubt, supported by its lion’s share of the video-on-demand market, with 9.4 million users in an estimated 12-million-strong market.
The chain is still a far cry away from bankruptcy, but closing down more than a fifth of your installations can’t be good. If you’re currently employed at Blockbuster, I’m not going to say that you should break out the ol’ resume, but it can’t hurt to keep it updated. Just in case.