Audio Video News

The mega-retailer that killed innumerable independently owned neighborhood video stores is now coughing blood.

In its annual report, Blockbuster says that "competitive industry conditions"--presumably a reference to big video-sales rivals in general and the Netflix rental operation in particular--have raised "substantial doubt about our ability to continue as a going concern."

Blockbuster closed 374 domestic stores in 2009 and 253 more in January 2010. The full number of closures for 2010 is estimated at 500 to 545. Blockbuster currently has 4018 stores in the U.S. and 2500 overseas. However, Blockbuster Express kiosks already number 3000 and may reach 10,000 by year-end.

Movie Gallery, one of Blockbuster's few surviving competitors, will close 800 of its 2400 stores this year. Blockbuster may follow Movie Gallery into bankruptcy court.

The numbers don't look good. Last year revenue declined 20 percent last year from the previous year, upping losses by 49 percent to $558 million. Since Blockbuster left Viacom in 2004, sales have been down 33 percent. It probably doesn't help that Blockbuster took out a $1 billion loan to pay off its former owner. Even if Blockbuster were healthy, the growth of video streaming and downloading would threaten its survival.

See Variety.