Under increasing pressure from Netflix's mail-order and online services and Redbox's $1 mall kiosks, among other competition, Blockbuster will shutter up to 40% of its stores over the next two years
to boost profitability and save $26 million in working capital, Sarah McBride reports. It previously planned to close 1,000 stores, but the figure has risen to as many as 1,560 of its 3,750 outlets.
Consumers' viewing patterns are shifting as well. "Home-video sales are estimated to fall between 8%-10% this year, according to Adams Media Research, in part because people are spending
more time with other types of entertainment such as the Internet," McBride writes.
Blockbuster's by-mail business has shrunk to 1.6 million subscribers from as many as three million since
it stopped promoting it aggressively. Netflix, by comparison, has 10.6 million subscribers.
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