Blockbuster and Borders appear to be stuck in the same boat – one that’s sinking, anyway.
Blockbuster Inc. is bankrupt because it couldn’t keep up with rival Netflix, which has a fast-growing digital business and more mail-order DVD subscribers. Borders Group Inc. is in deep financial trouble because it didn’t embrace online sales as quickly as competitor Barnes & Noble.
According to separate reports in the Wall Street Journal:
Blockbuster is asking for more money to help it emerge from bankruptcy protection and also is considering closing as many as 1,000 stores. Borders is on the verge of filing for bankruptcy. The chain — which already closed hundreds of stores, can’t pay its bills and has issued IOUs to landlords and publishers — apparently has hired bankruptcy and restructuring lawyers.
Blockbuster is hoping digital movie sales, steaming capabilities and an expanded mail-order and kiosk business will buoy its business after bankruptcy – or at least help it compete with Netflix.
That could be wishful thinking. The home entertainment company had 1.2 million subscribers to its DVD mailing service through the first nine months of last year, down from 1.5 million in the year-earlier period, the Wall Street Journal reported. Netflix had 16.9 million subscribers during the same time period, up from 11.1 million a year earlier.
Meanwhile, Borders could be writing its final chapter — titled, “Missed the boat”.
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