Blockbuster files for bankruptcy

[EmporerEJ]

Originally Posted by RawAlex

Toby, if it was only video stores and netflix, blockbuster would survive just fine. There is plenty of market there. However, the reality is that piracy killed the market down enough to where the 30% of the pie that blockbuster would get is no longer enough to sustain their business (1 billion in debt). Yes, Netflix took a lot of market share from them, but piracy shrank the size of the market.

No, they really wouldn't, and piracy had nothing to do with Blockbuster's failure.
Since I was in the video business before, and now after, what will be blockbuster, I know something about this.
I was in the "video store" business from 1985-1994 with 4 retail stores in central PA. These were multi-thousand title stores, (Allot for then) with a "back room." But by no means were they confused with adult stores. Blockbuster rose to prominence about the time I got out of the daily retail biz of video. (Got tired of standing behind the counter for the most part.)
At that time, there was no "DVD," it was all VHS. Blockbuster survived on a variation of the "rentrack Scheme," first introduced by National video in the late 80's. This was an unholy rev share program with the studios, much like the theater business. This had a HUGE advantage with VHS, but not so much with DVD.

(Price comparisons: VHS Wholesale=$67, DVD =$16)
Blockbuster slowly inced the rental prices up from $2.49/day (What we got) to $5 for DVD, while massively lowering the wholesale cost by a factor of 5. They should have raked in the cash, and they did, for several years.
Netflix was a natural progression, as was redbox. Those two items are what killed blockbuster, and what has created a new short term (5-8 year?) money making possibility. The Kiosk. (WITH all varieties)

Yes, I own 2.

Piracy is now, and always has been, irrelevant in the numbers. It just doesn't show up in the stats.
And those numbers they project? All bullshit. all those sidewalk vendors are a drop in the bucket to the real sales numbers.

When you consider that Walmart is the single, largest, vendor of DVDs in the USA, you'll quickly see why the studios are willing to change their DVD releases to satisfy bentonville.