Blockbuster U.S. Rings Its Final Death Knell, Closing 300 Stores

Ladies and gentlemen, today I'd like to talk to you about digital distribution. Specifically, I'd like to have a look at one of the changes it's brought about in our world. Namely, the death of physical video and game rentals. 

When I was growing up, I lived a couple blocks away from a rental store - Five Star Videos, I think it was called. Probably about once a week, I'd swing over there and come home with either a game or a movie. I didn't really think much of the five-to-ten dollar charge (and the several-day deadline) on the products I came across. I mean, it was just what people did, right? I certainly didn't know any different; my friends and I would frequently tromp over and rent a game or two for the weekend. 

After moving out and starting up at University, I began to go to these stores less and less frequently. I'd discovered the Internet, and I literally had a whole world at my fingertips. Why should I have to pay a few dollars for a movie I'll just have to return in a few days when I can watch (and play) pretty much whatever I want for free? I literally had no reason to even think of going by Blockbuster. 

Netflix and Steam only made things worse. Suddenly, any game I could possibly want to play, any movie I could possibly want to watch was within arms' reach. Rather than having to get up and trudge over to the store, I could just lounge about at home and watch to my hearts' content. Such convenience was, at the time, alien to me. 

I've grown accustomed to it now, though. Those days in which renting a movie was the only way to really watch it outside of TV seem almost like another life. The idea of actually having to go and rent a game...that's the foreign concept, now. 

It's thus no surprise to me that Blockbuster today announced that it's finally gone out of business. 

The Dish Network announced today that it intends to close all remaining Blockbuster stores and distribution centers in the United States by January 2014. Over 300 locations will be shut down, effectively marking the organization's departure from physical retail. This December, the DVD-by-mail service will also be axed.

Unfortunately, this shutdown brings with it something of a heavy toll. Over 2800 jobs are going to be lost as a result of the organization's collapse. That said, this still feels like it was a long time coming - The Dish Network acquired Blockbuster in September 2010 for the tidy sum of $320 million. At the time, the organization was already feeling the press of virtual storefronts - it had filed for bankruptcy that year. 

Dish was, unsurprisingly, unable to revive the ailing property.

That doesn't mean its entirely lost, however. Dish, at least, feels there's still potential in the Blockbuster brand. That potential lies not in any storefront, but in Blockbuster@Home and Blockbuster On Demand.

"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," explained Dish CEO Joseph P. Clayton. "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 offerings." 

Personally, I think it's a lost cause at this point. To put it simply, there are better digital services out there than anything Blockbuster has to offer. Unless Dish manages to seriously rework the Blockbuster brand, I think we can call time of death for that arm of the organization.