Convenience Comes with a Price
Bankruptcy filings are on the rise nationwide. Every state has shown an increase in bankruptcy filings over the past year. However, the down economy is not only forcing individuals and families to seek financial protection through filing bankruptcy. Some major companies with “household names” are seeking bankruptcy protection as well.
Today’s financial woes know no boundaries. There are some well known national companies that are struggling with the current economic recession. Video giant Blockbuster plans to close over 1500 of its (3750) retail outlets during the next 24 months. Movie Gallery Inc. filed for Chapter 11 bankruptcy protection in February 2010. Movie Gallery immediately closed 760 of its movie rental stores.
In Arizona, Movie Gallery Inc., (which owns local video stores Hollywood Video) is closing eight of its 36 Arizona video stores. The eight stores going out of business are primarily located in the Tucson and Phoenix markets. The recent closures announced by Movie Gallery Inc. and Blockbuster are on top of the dozens of Arizona video stores and thousands of nationwide video stores that have already been closed down by the two chains.
All of those Red Movie Rental boxes popping up in your favorite grocery store and gas station are costing many Arizona workers their jobs. These video rental boxes are very popular as they are both more affordable and more convenient than the traditional free standing video stores.
The majority of these grab-and-go movie kiosks are from Coinstar Inc’s Redbox. The Redbox video rental portals are very successful as their movie rental fees are (in most cases) substantially less than the fees charged at the major video rental chain stores. These unmanned video dispensers are decimating local Arizona video-rental giants such as Hollywood Video and Blockbuster, plus they are taking jobs out of an already distressed job market.
Another major contributor to the downward spiral of the video stores demise is Netflix Inc. Netflix offers videos by mail and videos on-line, eliminating the necessity of going to the local video store to rent a movie or video game. The convenience of both Redbox and Netflix has led to hundreds of former Arizona movie rental employees to join the ever-growing ranks of the unemployed.
Blockbuster has moved into the video-by-mail market in an attempt to compete with industry leader Netflix. Blockbuster has also opened several unmanned video rental kiosks to compete with Redbox.
Despite the new endeavors, Blockbuster still lags far behind their new competitors in both number of subscribers and kiosk locations. Their traditional movie rental stores will continue to struggle. In the end, even all of those years of charging their then-loyal patrons astronomical rental and late fees may not be enough to save them. Can a Chapter 11 bankruptcy filing by Blockbuster be far behind.
For more information about filing for Chapter 7 bankruptcy, Chapter 13 bankruptcy filing, bankruptcy planning or filing for bankruptcy, contact one of our bankruptcy lawyers and speak to any of our experienced attorneys in Phoenix, Chandler, Tucson, Glendale, Mesa, Flagstaff or anywhere in Arizona. Contact one of our regional offices. It’s time for a fresh start.