Poor Blockbuster, even after wiping out their debt via bankruptcy they still can’t seem to figure out the home entertainment market. When he noticed that a nearby Blockbuster was closing down, Dan Rayburn with StreamingMedia.com decided to pop in for some bargains. After a closer look however he noticed that prices for used DVDs were 2 times the cost of a new one at Amazon.
“Apparently Blockbuster doesn’t know what movies rent OR sell for these days. I don’t like seeing a company go under, it puts a lot of people out of jobs, but in this case, as a consumer, one can’t help but be happy to see Blockbuster closing down. Any company that treats consumers as if they are idiots and thinks they don’t already know of other options in the market for getting movies cheaper and in better quality, does not deserve to stay in business.”
Harsh words, but he hits the nail right on the hammer. I get the sense that Blockbuster’s creditors never really took the problems at the company all that seriously. Nevermind having to be crazy to loan them money to begin with, the way they’ve chosen to negotiate is nearly schizophrenic. Even before they went into bankruptcy there were all kinds of mixed signals. Now they can’t seem to figure out whether they want to save the company or just liquidate it for the pocket change that is left. My guess is that they thought they could turn this thing around by raising prices and injecting a little bit of cash, but now that consumers have walked away and are clearly not interested in paying these prices, they are bleeding cash in a bad way.
Fast forward to today and their creditors seem like they are having second thoughts about throwing good money after bad. With each delay, it’s looking increasingly likely that Blockbuster’s bankruptcy will end up getting a sequel (or at least a chapter 11 written.) Blockbuster may try to put what’s left of their company on the auction block, but unless they can prove that they can stop losing money, there’s no way that they’ll get anywhere close to the $300 million they’ll need to survive. My advice for the savvy bargain shoppers . . . hold off on your DVD purchases for six more months so you can take advantage of their real liquidation sale.