Dish closing Blockbuster stores

Dish closing Blockbuster stores

November 7th, 2013 by Associated Press in Business Around the Region

This 2010 file photo shows a closing Blockbuster stores in Racine, Wis. Dish Network announced Wednesday, Nov. 6, 2013, it will close the remaining 300 Blockbuster locations scattered across the United States.

Photo by Associated Press/Times Free Press.

Previous Chattanooga locations

• Dayton Boulevard

• Gunbarrel Road

• Lee Highway

• Battlefield Parkway

• Highway 58

• Highway 153

• Ringgold Road

• Ooltewah

SAN FRANCISCO - The final curtain is falling on the remaining Blockbuster video-rental stores that Dish Network Corp. runs in the U.S.

The closures announced Wednesday will affect about 300 Blockbuster locations scattered around the country, including the last store in Tennessee.

As part of Dish Network's retreat, Blockbuster's DVD-by-mail service also is shutting down next month.

About 2,800 people who work in Blockbuster's stores and DVD distribution centers will lose their jobs, according to Dish Network.

An employee at the Athens, Tenn. store -- which appears to be the last open Blockbuster in the state -- didn't know when the store would shut down, but noted that it likely would run a liquidation sale similar to those at previously closed stores.

Blockbuster's store locator revealed no existing stores in Chattanooga, Nashville, Memphis or Knoxville, nor are there any stores left in Fort Oglethorpe, Dalton, Ga., or Calhoun, Ga.

The chain initially began closing stores on Lee Highway and Gunbarrel Road -- locations that were leased, rather than owned -- after it filed for Chapter 11 bankruptcy protection in 2010.

The cost-cutting measures culminate a Blockbuster downfall that began a decade ago with the rise of Netflix's DVD-by-mail service, followed by the introduction of a subscription service that streams video over high-speed Internet connections.

"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," Dish Network CEO Joseph Clayton said in a statement.

The shift has been a boon for Netflix Inc., which now boasts 31 million subscribers to its Internet video service and another 7.1 million DVD-by-mail customers. The company's success has minted Netflix with a market value of $20 billion.

But Blockbuster absorbed huge losses. It closed thousands of its stores before landing in bankruptcy court three years ago. Dish Network bought Blockbuster's remnants for about $234 million in 2011 and then tried to mount a challenge to Netflix.

But Dish Network couldn't wring a profit from Blockbuster either, prompting even more store closures.

The Englewood, Colo., satellite-TV provider already had closed about 500 Blockbuster stores this year. The latest closures, scheduled to be completed by early January, will leave the U.S. with just 50 Blockbuster stores operating under franchise agreements.

The chain's near extinction serves as another stark reminder of how quickly technology can reshape industries. Just a decade ago, Blockbuster reigned as one of the country's most ubiquitous retailers with 9,100 stores in the U.S.

Dish Network is trying to keep the Blockbuster brand alive through an Internet video-streaming service that rents movies and TV shows by title, for a set viewing time.

Blockbuster suffered an operating loss of $35 million on revenue of $1.1 billion last year and posted an operating loss of $4 million during the first half of this year, according to regulatory filings.

Staff writer Ellis Smith contributed to this story.