Blockbuster shares took a pounding today – dropping by as much as 30 percent, The company has said that they may have to file for Chapter 11 bankruptcy protection, which they blame Netflix and Coinstar for – saying that they have had a huge impact on its sales.
Netflix Inc. the DVD-by-mail company and Coinstar Inc., the DVD vending machines operator has been offering consumers another alternative to just Blockbuster, and it seems that they like the service offered by these two other companies.
According to Associated Press, Blockbuster may have to file for bankruptcy if they are unable to convince creditors to help reduce their debt. The DVD rental company has now closed about 1,300 stores and looks to shut down more.
Blockbuster has been trying hard to update its business; they have tried to compete with Coinstar – offering a video rental kiosk, and have also tried to copy Netflix with its DVD-mailing service. Blockbuster has even entered into the on-demand service with Tivo, which you can read more about here. However, none of this has helped and the company now owes $975 million.