Dish Network to Close the Last Company-Owned U.S. Blockbuster Locations
Dish Network will close the last of Blockbuster’s 300 company-owned U.S. brick-and-mortar stores and its DVD-by-mail business by January, Dish said, further shrinking a once-sprawling chain that fell victim to the sharp shift to digital streaming services.
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The fate of Blockbuster, that at its height had more than 7,000 stores globally, appeared sealed earlier this year when Dish said it would close 300 outlets to shrink the chain to 500 locations. The remaining stores were scattered across the U.S., including eight in Dish’s home state of Colorado, and another 100 were slated to shut this fall, Dish said. Dish bought the ailing chain and 1,500 stores out of bankruptcy protection for $228 million in 2011 . At the time, it weighed selling its satellite service and potentially wireless through the stores. Blockbuster will continue to support 50 franchised locations in the U.S. and another 400 in international markets, a Dish spokesman said. Dish closed Blockbuster locations in the U.K. and Scandinavia last year.
Dish will continue to use the Blockbuster brand for selling video services using its Blockbuster @Home and Blockbuster on Demand products, Dish said. Blockbuster on Demand is a video streaming service, while Blockbuster @Home features more than 15 movie channels including Starz, Sony Movie Channel, Hallmark Movie Channel and 20,000 movies and TV shows streamed to TVs, PCs and tablets.
Blockbuster’s fall was rapid from 4,585 stores in the U.S. in 2009 to 3,745 the following year and 1,717 as it neared bankruptcy. It initially struggled as Coinstar -- since renamed Outerwall -- expanded its Redbox DVD and Blu-ray kiosks. Blockbuster forged an alliance with NCR for a similar product called Blockbuster Express. NCR eventually sold the business to Outerwall. Blockbuster also sought to counter emerging video streaming services from Amazon, Netflix, Roku and Vudu with Blockbuster on Demand, but didn’t attract a large number of subscribers, Blockbuster executives conceded.
"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” Dish CEO Joseph Clayton said in a prepared statement. “Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital."
Blockbuster’s Q2 operating loss narrowed to $5 million from $13 million a year earlier despite revenue shrinking to $121 million from $253 million, Dish said. Dish is scheduled to report Q3 earnings Nov. 12.