Blockbuster’s bust: Files for Chapter 11
TEXT OF INTERVIEW
BILL RADKE: You’ve heard the rumors for months. This morning, Blockbuster filed for Chapter 11 bankruptcy protection, saying it needs time to reduce its debt load and reorganize the company. Marketplace’s Alisa Roth joins us live from our New York bureau. Hi Alisa.
ALISA ROTH: Good morning.
RADKE: Blockbuster, man, that used to be the place to go for video rentals. How did that slip away?
ROTH: Well the short answer is technology. Blockbuster is just behind the times. You said it was the place to go for video rentals — well, when’s the last time you actually rented a movie, let alone a video? If they’re renting at all, people are getting movies through kiosks like Redbox or through the mail Netflix-style. But the reality is, a lot of people are doing instant download or using On Demand, or just watching on their iPod or iPad.
RADKE: Right, and how can a neighborhood store compete
with the Netflix warehouse full of DVDs?
ROTH: Yeah, or iTunes’ server full of movies. It’s interesting because we haven’t seen that many bankruptcies lately. And the ones we have seen are related to the recession or the slow recovery. This one seems like might have happened recession or not.
RADKE: I talked about reorganization earlier, so Blockbuster is not going away totally?
ROTH: Not yet. It says that it’s keeping its 3,000 stores open. It had announced previously that almost 1,000 stores were going to be shut down and that’s going to still happen. Speculation is there will probably be more closures down the road. Beyond that, Blockbuster says it’s going to try to strengthen its balance sheet, that’s how the CEO puts it. And try to change the business model to something that people are actually interested in using. But it’s probably not radical to say this may be too little too late.
RADKE: That’s Marketplace’s Alisa Roth joining us from our New York bureau. Thanks Alisa.
ROTH: You’re welcome.
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