So how bad could it be? Well, just take a look at Blockbuster's record over the past few years: they have closed hundreds of stores, sales have gone down by 20%, and profits are plummeting. The retailer made some attempts last year to get into the digital content game, but I think this is a case of too little too late, because revenue from their new kiosks, online rentals, and streaming video hasn't helped. Now compare that to a company like Netflix that has grown annually by 20 per cent and is posting profits of $679.7 million for 2009.
Blockbuster had revealed that it was in negotiations with Hollywood studios for better financial terms to provide their stores with DVDs when the bankruptcy story hit the wire. If Hollywood decides that Blockbuster is too much of a financial risk, it could force the already cash-strapped retailer to make up-front payments for their content, and with 'liquidity' being a real problem for the video retailer, it could be the last nail in the coffin. So far, the financial melt-down is focused in the US, and according to Blockbuster, Canadian and UK stores are just fine. But I can't be the only one who thinks it's just a matter of time before what started out as a joke has gotten one step closer to becoming reality.