Blockbuster is hoping to turn around its business by declaring Chapter 11 bankruptcy. The movie rental company has already closed over 1,000 stores nationwide, but has still been struggling due to other, more convenient types of rentals such as Netflix or Redbox. Blockbuster has been trying to stay competitive with these companies by offering rentals through the mail and in digital format. The movie rental industry has changed dramatically over the last few years, and Blockbuster’s filing for bankruptcy did not come as a surprise.
Chapter 11 would erase over $1 billion of debt that the company is facing. The vast majority of this debt is owed to major motion picture studios such as Warner Bros., 20th Century Fox, Disney, and Sony. The remaining open stores will likely stay open during the bankruptcy process as long as things go well in court for the company. It is expected that the company’s new focus will be more on kiosks and digital movies.