Back in April when Dish Network paid some $320 million to take over Blockbuster’s retail video rental operations, the company said it planned to keep some 1,500 Blockbuster locations operating, as well as keep some 15,000 Blockbuster employees on the books to keep thing humming along. Now, however, Dish Network is admitted it’s going to be able to keep fewer Blockbusters operating than it had originally projected—although it hadn’t yet determined how many that might be, or when the closings might take place.
“We are committed to keeping the profitable stores open that are generating positive cash flow, but there are ones that aren’t going to make it,” Dish Network CEO Clayton said in an interview with Reuters. “We will close unprofitable stores.”
Dish Network’s earlier commitment to keep some 1,500 Blockbuster retail operations going represented about 90 percent of Blockbusters retail locations at the time of the acquisition.
Dish Network is looking to challenge Netflix with BlockBuster Movie Pass, a new Internet streaming and DVD-by-mail service. The company had planned to re-invigorate the Blockbuster retail business by adding Dish customer support and customer payment services to the stores: Dish customers would be able to go to BlockBuster stores to get replacements set top boxes, remotes, and other Dish services without having to schedule an appointment (and time off work) for installation or technical support. Dish has also discussed plans to enable Dish Latino customers to pay for service at Blockbuster stores.
Blockbuster once dominated the video rental business, driving smaller chains and many neighborhood video rental services out of business. However, Blockbuster was itself undercut by Netflix’s popular DVD-by-mail service, which eliminated late charges and enabled customers to rent titles without having to set foot in a store. Just a few years ago, Blockbuster boasted some 60,000 employees and operated more than 4,000 retail locations in the United States.