Though we’ve been hearing for months that the Canadian arm of bankrupt U.S. movie rental giant Blockbuster Video has been doing just fine, it was put into receivership by court order yesterday. Apparently, despite the fact that the Canadian branch is still a functioning business, the assets are being shut down and sold off to pay back the American company’s creditors. Of course, there’s but one competitor to blame: big, bad and oh-so-wonderful Netflix.
The Globe and Mail has the story:
[Blockbuster] is now on the block—its 400-plus stores will be kept open by receiver Grant Thornton Ltd. as it pursues a sale. Employees have been told they will now be paid weekly instead of bi-weekly [and] have been issued their vacation pay and told not to sell gift certificates for the foreseeable future.
“The company’s stores are open for business,” the receiver said in a statement. “The receiver expects to initiate a process in the near term to identify parties interested in purchasing Blockbuster Canada’s enterprise and assets.”
Sure, the doors may be open for business, but it’s difficult to imagine who would want to buy Blockbuster Canada in a world where Netflix is offering a whole month of unlimited viewing for roughly the cost of a single DVD rental. Even in Canada’s ridiculous Internet market, where Netflix downgraded its video signal in a bid to keep customers from going over their monthly bandwidth caps, the future for big box movie rental stores remains bleak. All the same, we’re a little concerned that a functional business is being auctioned to pay American movie studios. Apparently, suing Internet pirates just isn’t contributing to the bottom line like it used to.
At least in Toronto, the market for smaller, indie stores seems to still be strong. Queen Video is going gangbusters, and there are other, similar success stories from around the city. For those who still want to talk to actual humans—we know, shocking—about the latest obscure French film, this might be a business model for the future. Until Netflix allows customers to Skype with film nerds across the planet, of course.