Blockbuster Bankruptcy Filing Not a Surprise to Some

Movie rental staple Blockbuster filed for Chapter 11 bankruptcy protection earlier today, according to Tech Crunch. WasBlockbuster's bankruptcy an inevitable surprise? Movie rental storefronts are quickly becoming a thing of the past as consumers move toward digital or home-delivered movies. Case in point: Movie Gallery, Inc., which had been second only to Blockbuster, shuttered its stores nationwide this spring after re-entering bankruptcy protection in February.

Netflix's recent expansion into Canada

Having gotten a firm hold on the American market, Netflix launched its streaming service in Canada yesterday, though with some controversy by bringing in paid actors to appear excited at the news of the official launch. Canadians can stream movies for just under $8 a month, but they cannot receive them via mail, something that U.S. consumers enjoy for only $1 more per month.

Netflix is the clear leader in the DVD rental market, and will only continue to gain steam as it expands its customer base. Without a doubt, Netflix's strong market presence contributed to Blockbuster's bankruptcy filing.

Redbox also taking market share away from movie rental stores like Blockbuster

While Redbox kiosks are becoming ubiquitous in America, Blockbuster Express kiosks are continuing to pop up as well. Fox Business reported in March this year that NCR, who handles kiosk placement for Blockbuster Express, plans to have 10,000 Blockbuster Express kiosks in stores and other high-traffic areas by the end of this year, meaning that they are finally beginning to aggressively compete with rival Redbox, who has approximately 23,000 kiosks spread out through the country. Still, the divide is huge and there is a lot of ground to be made up be a strong contender in the DVD-via-kiosk market.

Blockbuster issues press release after Blockbuster bankruptcy is announced

Blockbuster released a press release, available on Blockbuster.com, that states that they are honoring all gift cards, store credits and coupons, and intend to continue doing business as usual. The press release is meant to assure wary customers that their rewards will still be accrued, and their Blockbuster Express kiosks will still be dispensing movie rentals to customers who wish to use their service.

Sources:

Blockbuster press release, dated 9/23/2010

NCR Rolling Out More Blockbuster Express DVD Kiosks, Fox Business, March 14, 2010; retrieved 9/23/2010

Netflix Slips in Canada, The Motley Fool (via MSNBC), September 22, 2010

No. 2 Rental Chain Hollywood Video to Close, Associated Press, May 10, 2010; retrieved 9/23/2010

Once Upon a Time in America, Blockbuster Files for Bankruptcy, TechCrunch.com, 9/23/2010