Blockbuster Video: Dish Network’s $234 million late-fee

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About 15 years ago, most elementary school or junior high students celebrated Friday evenings as I did, with two adolescent favorites: pizza and Blockbuster.

It was an end-of-the-week treat. Riding with Mom or Dad to the area video rental franchise, examining the new releases, and eventually settling on two or maybe three titles for weekend viewing. A cheese pizza for dinner, followed by the latest Will Smith action adventure, over a box of Milk Duds, made for a perfect night.

Does anyone still have a laminated Blockbuster card taking up space in his or her wallet?

Today, if I, or any teenager, college student, or parent, wanted to, with the swipe of an index finger, we could watch “The Girl with the Dragon Tattoo,” “The Descendants,” or “The Muppets,” for $4.99 on a television, laptop, tablet, or phone.

Anytime. Anywhere.

Think about that for a minute, and it’s easy to understand why brick-and-mortar video rental stores have become irrelevant to today’s home entertainment consumer. Blockbuster was late to the game of instant-gratification movie watching.

Any movie you want is a finger-swipe or a click away through iTunes or NetFlix, or the title has been discounted to $1 at a RedBox unit in your local grocery store. New releases are even available through most cable On Demand products.

Dish Network, which bought Blockbuster out of bankruptcy for $234 million in April 2011, recently said it would close about 500 underperforming and unprofitable Blockbuster locations across the country – about one-third of the company’s remaining Blockbuster stores – by the middle of the year. That move comes after 960 Blockbuster stores closed in 2009.

Also, here’s some sobering news for the remaining 1,000 stores, according to Dish Network’s filing with the Securities and Exchange Commission:

“Our Blockbuster business, and retail stores in particular, face risks, including, among other things, operational challenges and increasing competition from video rental kiosk, streaming and mail order businesses that may negatively impact the business, financial condition or results of operations of Blockbuster.

We continue to evaluate the impact of certain factors, including, among other things, competitive pressures, the scale of our Blockbuster retail operations and other issues impacting the store-level financial performance of our Blockbuster retail stores.  These factors, or other reasons, could lead us to close additional Blockbuster retail stores.  There is no assurance that we will achieve the expected benefits from the Blockbuster Acquisition.”

 Dish Network offers Blockbuster@Home, a movie mail and streaming service, which was originally thought to be a competitor to NetFlix, but the service is available only to Dish subscribers.

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