Netflix Thrives after The Bankruptcy Plan of BlockbusterBy Dipankar Das, Gaea News Network
Saturday, August 28, 2010
According to a report by Los angeles Times, Blockbuster Video is planning for bankruptcy next month. The report further says that the plan was designed by Blockbuster so that they can get out of the leases on perhaps 800 underperforming stores. The company already closed 100 retail stores last year. The chain operates more than 3,400 stores.Those days are gone that you can drive a video store to rent a movie. For the last several years, Blockbuster has closed stores, laid off thousands, and generally been tending towards extinction.
A significant number of movie lovers have opted for renting movies via rental kiosks such as Redbox, cable’s video-on-demand, and Internet rental services like Netflix. Since 2008, Blockbuster has lost more than a $1 billion and the demand for Netflix shot up drastically. Netflix’s internet streaming video service attracted many audiences and generated huge cash for the company. The company signed a $1 billion contract this month to stream movies from Paramount, Lionsgate, and MGM.
Although, the studios tried many times to block Netflix from getting specific titles. However, the company managed different way to get them. The Los Gatos, Calif.-based Netflix will most likely boast for top 20 million subscribers next year and last year generated $115 million in net profit on $1.6 billion in revenue.