Blockbuster to shut remaining stores in U.S.
11/06/2013 6:38 PM
11/06/2013 7:09 PM
Blockbuster LLC, the video-rental company now owned by Dish Network Corp., will close its remaining 300 U.S. stores. It ends an era for the chain that Fort Lauderdale billionaire H. Wayne Huizenga had founded, which had become a ubiquitous part of American shopping centers.
Blockbuster will shut the outlets by early January and also discontinue its DVD-by-mail service by the middle of next month, Englewood, Colo.-based Dish said Wednesday in a statement. The company will keep the licensing rights to the Blockbuster brand and use it with Dish services. It also has a video-streaming product called Blockbuster On Demand.
Blockbuster’s website lists five remaining South Florida locations: 1500 Alton Road, Miami Beach; 9007 Biscayne Boulevard, Miami Shores; 2601 SW 147th Ave, Miami; 20595 Cutler Road, Cutler Bay; and 6501 Nova Drive, Davie.
“People were waiting for the death knell for that business for many years,” said Matthew Harrigan, an analyst at Wunderlich Securities Inc. “With everything happening on the digital distribution side, it has been long overdue.”
Dish, which acquired the chain out of bankruptcy in April 2011, had already divested Blockbuster’s international assets, including operations in the U.K. and Scandinavia. The company has been gradually shutting down the 1,700 stores it acquired.
“This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” Dish Chief Executive Officer Joseph Clayton said in today’s statement. “We continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings.”
Blockbuster was once so dominant in the home-video market that it was sued by independent video retailers, which claimed in 2001 that the company’s revenue-sharing agreements with movie studios hurt competition. The lawsuit was later dismissed.
Blockbuster Video, which had been based in Fort Lauderdale, was begun by Huizenga with a handful of stores in 1987. It had become the country’s leading movie rental chain by 1994, when it was sold to Viacom in an $8.4 billion stock-swap merger with the company.
When the company was spun off by Viacom Inc. in 2004, it operated about 9,000 locations — before streaming video services such as Netflix Inc. devastated the industry. Blockbuster filed for bankruptcy protection in September 2010.
Dish took over Blockbuster the following year, aiming to use the stores to sell mobile devices that could stream Blockbuster movies. The plans broke down when U.S. regulators didn’t immediately approve a waiver allowing Dish to use its satellite spectrum for terrestrial data and voice transmission.
The Blockbuster brand will continue at Dish through the Blockbuster @Home and Blockbuster on Demand options, which stream movies and videos to televisions, computers and other devices, Dish said.
Dish shares fell 0.4 percent to $48.84 in New York on Wednesday. The stock had risen 34 percent this year through Tuesday.
While the demise of the Blockbuster chain is symbolic for the industry, it won’t have a big impact on Dish’s prospects, Harrigan said: “It’s certainly an end-of-an-era type thing, but in terms of that affecting Dish’s stock, it doesn’t have any particular importance.”
Miami Herald staff writer Doug Hanks and Herald wires also contributed to this report.
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