Blockbuster: a Relic of Old Times?

Blockbuster, the company used to rule the world of video and DVD rentals sees itself forced to admit obliteration.

Not more than six years ago the value of Blockbuster shares was as high as $30. Today, as the idea of a high street video rental chain becomes more of an anachronism every week, the shares are trading at just $2.67.

In this always-on-the-go digital era the idea of going out to a shop to rent a movie has lost its…credibility.

But because over the last years, Blockbuster has been busy trying not to fall behind subscription and mail order DVD rental outfits like industry leader Netflix, it neglected this aspect.

However, Blockbuster remains the DVD rental market leader in the US, having approximately 20 million customers visiting its stores every year. Despite that, the company has been losing ground, making way for Netflix to turn very successful with 8.2 million subscribers to its mail order service and a catalogue including 100,000 films to choose from.

Blockbuster was too conceited to consider Netflix as a worthy player. When it finally did it was too late and launched its own DVD by mail subscription service in 2004. Since then, the old high street stalwart has limped along, making one embarrassingly large loss after another, while Netflix - and technology - continue to leap forward with remarkable agility, at least by comparison.

It’s no big secret that legal movie downloads promise to be the next craze in home entertainment. Actually, their dominance in USA has been going on for quite a while.

Apple, the giant corporate, is currently working on version two of its Apple TV service, designed to let subscribers to download movies through iTunes on to a set-top box and also an impressive number of free video podcasts.

What announces to be a great, user-friendly Apple TV service is scheduled to make its premiere in the UK later this year. The service’s offering will include the latest film releases in high definition at the price of £3.99 each.

Netflix has joined forces with Roku to create its own version of the Apple TV set-top box, which will connect users to an immense source of film downloads. Not only will it make you forget about having ever walked down to the video shop but it will allow you to watch a film even before the post appears.

It seems that Blockbuster wants to (finally) launch its own online streaming video service. However, the company proves to be one step behind the rest of the market again there are no signs things will change any time soon.

What may probably count as a smart move for Blockbuster is its withdraw from $1.3bn deal to buy American electronics retailer Circuit City last week.