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DISH Closes the Doors on More Blockbusters

DISH Network (DISH) bought struggling Blockbuster back in 2011 for $325 million, but any hope that it could bring life back into the brick-and-mortar video stores is fading quickly. Last year it shut the doors on around 500 Blockbuster stores, and has now announced that it plans to close another 300 stores in the U.S.

Blockbuster is a dinosaur in today's world. People across the nation used to pile into their cars on a Friday night, run to their local Blockbuster, and pick up a movie to enjoy. That simply doesn't happen in today's world. Technology changed, and Blockbuster is quickly going extinct.

With services such as Amazon (AMZN), Netflix (NFLX), and Cable on Demand, there is just no reason why anyone needs to rent movies from a Blockbuster. And these are just the legal avenues people have to rent movies. Once you consider the widespread use of illegal sites to download videos such as torrents and peer-to-peer, it is easy to understand why Blockbuster is struggling.

Not only is it struggling, it is dying. There is nothing that Blockbuster, or DISH, can do to save its business, at least not in its current form.

Blockbuster stores are huge. The rents are expensive, and they just do not make financial sense. When you used to need Blockbuster it was great to walk in the stores and have hundreds of titles to chose from… but now its size is working against it just in the same manner that Best Buy (BBY) is fighting a losing a battle with its huge store spaces.

Blockbuster can continue to live on, but it will not be the same company. It has a lot of titles at its disposal, and has a lot of brand recognition in the video rental market, but it needs to focus on its one-night rental kiosks, and strive to compete for online rentals.

After the closing of these 300 stores, there will be about 500 Blockbuster stores across the nation, but if you want to rent a movie there, you better hurry… they will not be around long. I expect that as more leases come up for renewal we are going to see more closings.

Technology is a great thing, but it can also devastate companies. Borders and Circuit City are two perfect examples of companies that were not able to adapt… and Blockbuster will soon be the next example.

It was a great company, and a great concept in its prime, but those days are gone, and DISH is not going to be able to breathe life back into the dying company's brick and mortar stores.

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.