eLifespaces

The bricks and mortar of Blockbuster are proving to be far more burdensome for the movie rental giant. In the wake of the FCC’s initiative to expand broadband access nationwide (a major distribution channel for Netflix, iTunes, Redbox, and others), the Blockbuster distribution systems appears to be replacing the “buggy whip” a symbol for anything that is hopelessly outmoded.

On Wednesday, Blockbuster released its annual report, a document that made its investors react by sending the company’s stock down almost one-third of its earlier trading value. The video-rental chain said it needed to figure out a way to deal with its debt load and competitors or face a future in which it "would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under U.S. Bankruptcy Code." With 6,500 stores worldwide, Blockbuster reported a $435 million loss for the fourth quarter and has about $964 million in debt.

For small merchandisers, please read this as the missile across your bow. It is NOT about your product, it is about the value you add.