Hollywood Video Closes

[Townsend]

And boom goes the dynamite...

http://www.msnbc.msn.com/id/37068852/ns/business-media_biz

  MSNBC.com


Hollywood Video stores to close
Parent Movie Gallery Inc. filed for bankruptcy in February
By Michael Felberbaum
The Associated Press
updated 3:07 p.m. CT, Mon., May 10, 2010
RICHMOND, Va. - Movie Gallery Inc., the owner of struggling movie rental chain Hollywood Video, is planning to close its remaining stores and liquidate as consumers are increasingly get movies through the mail, vending machines and high-speed Internet connections.

The No. 2 rental chain behind Blockbuster Inc. filed a notice with the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond late last week that it will terminate its business operations after defaulting on a loan from one of its creditors.

An agreement filed with the court sais the move to close more than 1,900 remaining stores is in the "best interests" of the company and its creditors. The agreement does not specify a time line. It must be approved by a bankruptcy judge.

Phone calls to Movie Gallery and an attorney representing the company were not immediately returned.

The company, based in Wilsonville, Ore., filed for Chapter 11 bankruptcy in February, buckling under the competitive pressure from movies-by-mail service Netflix Inc., DVD kiosk company Redbox and delivery of movies and TV shows over the Internet.

The bankruptcy filing does not include Movie Gallery's Canadian operations.

It was the second trip through bankruptcy court in just three years for Movie Gallery.

The company first landed in bankruptcy court in October 2007, unable to sustain the debt it took on in its $850 million acquisition of rival Hollywood Entertainment Corp. in 2005. Movie Gallery agreed to assume about $350 million of Hollywood Entertainment's debt as a part of the deal.

The acquisition made Movie Gallery the No. 2 rental chain in the country behind Blockbuster Inc. but it has been forced to close more than 2,400 of its stores in the past three years, according to court filings. It had since announced plans to close more stores as part of its restructuring.

Despite moving to shut down unprofitable locations, the company said it continued to see "significant" losses in 2009. Annual revenue fell $546.3 million, or 28 percent, to $1.4 billion.

In a court filing, Movie Gallery Chief Restructuring Officer Steve Moore said the company was facing "looming defaults" on its loan agreements. The company listed debts of between $500 million and $1 billion, compared with assets of between $10 million and $50 million.


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URL: http://www.msnbc.msn.com/id/37068852/ns/business-media_biz/



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[dbacks fan]

Hollywood Video started closing stores here before the Febuary announcement. I was watching a story on the news this evening about it, and they were talkin about the fact that with Netflix on demand if you have an Xbox or a PS3(Ithink on the PS3), cable on demand, Red Box (owned by Wal-Mart), Hulu, and Amazon works with Tivo, they can't compete. My former brother-in-law in Vegas uses Amazon, downloads to one of his Tivo's and has I think 24 hours on it for I want to say a price comparable to Red Box. The only disadvantage I see to Red Box is finding older movies. It's simple, a buck plus tax at Red Box or $3.99 at a store, and Netflix offering $9.99 a month unlimited, the stores can't compete. Even Blockbuster is going to kiosk machines.

[Cats Cats Cats]

I worked a summer at the one in south Tulsa.  It was kind of fun... Except the manager would borrow money from the safe (so the rumor was) and he would go in and add 15 minute breaks as required by law after they wouldn't give them to us. Ahhh... Fun times.

[sgrizzle]

Hollywood Video started closing stores here before the Febuary announcement. I was watching a story on the news this evening about it, and they were talkin about the fact that with Netflix on demand if you have an Xbox or a PS3(Ithink on the PS3), cable on demand, Red Box (owned by Wal-Mart), Hulu, and Amazon works with Tivo, they can't compete. My former brother-in-law in Vegas uses Amazon, downloads to one of his Tivo's and has I think 24 hours on it for I want to say a price comparable to Red Box. The only disadvantage I see to Red Box is finding older movies. It's simple, a buck plus tax at Red Box or $3.99 at a store, and Netflix offering $9.99 a month unlimited, the stores can't compete. Even Blockbuster is going to kiosk machines.

Redbox is not owned by walmart, they are owned by coinstar which is an independent company.

I rented a movie at blockbuster the over day. It's $5 now and they don't even bother alphabetizing movies anymore. They are just kinda grouped by letter.

[dbacks fan]

Redbox is not owned by walmart, they are owned by coinstar which is an independent company.

I rented a movie at blockbuster the over day. It's $5 now and they don't even bother alphabetizing movies anymore. They are just kinda grouped by letter.

Thanks, I had been told it was Wally World that owned Redbox, my bad. But yeah, $5 at BB, no thanks.

[sgrizzle]

Thanks, I had been told it was Wally World that owned Redbox, my bad. But yeah, $5 at BB, no thanks.

I've heard mcdonalds too. I think it has to do with where they are located.

The stores that have these locations don't understand the point. 41st & Peoria Kum-n-Go has one next to their door... so people will rent or return a movie and also stop to buy something... well, they put it next to a door that is locked. You have to walk to the other side of the building to impulse buy something.

[dbacks fan]

I've heard mcdonalds too. I think it has to do with where they are located.

The stores that have these locations don't understand the point. 41st & Peoria Kum-n-Go has one next to their door... so people will rent or return a movie and also stop to buy something... well, they put it next to a door that is locked. You have to walk to the other side of the building to impulse buy something.

There are some locations here especially it seems at Walgreens that they have had to put two Redbox's to keep up with the demand. One I used to go to both machines would have a line six poeple deep waiting to use it on the week ends, and 150' away was a Hollywood Video that had more employees in the store than customers.

[Cats Cats Cats]

Sgrizzle had a time when he had to return 2 movies.  He put one in and then it was full for the 2nd.  So he had to go find a new redbox.

[Conan71]

I used to rent DVD's a lot more often. I think I've rented three or four since the holidays and all those were one of our snow weekends.  Maybe I'm wasting too much time on healthier pursuits these days 

[sgrizzle]

There are some locations here especially it seems at Walgreens that they have had to put two Redbox's to keep up with the demand. One I used to go to both machines would have a line six poeple deep waiting to use it on the week ends, and 150' away was a Hollywood Video that had more employees in the store than customers.

Can't beat $1, especially for those people who "make backups" of rented movies.

[Hoss]

Can't beat $1, especially for those people who "make backups" of rented movies.

That's kinda pointless now, though, what with a gajillion inch HD TVs and sub-250 dollar PS3s and Blu-Ray.

[nathanm]

Thanks, I had been told it was Wally World that owned Redbox, my bad. But yeah, $5 at BB, no thanks.

It's not so terrible for Blu-Rays, given that you get it for a week, but for your usual DVDs, yeah, BB is incredibly overpriced. (On Blu-Ray, they're merely overpriced)

[godboko71]

I used to have the blockbuster online service before we cut back. I liked the fact I could get 1-3 movies at any time and return them at the store and get free rentals. Now between streaming, on-demand I don't have as much need. Though I would start the service back up if I ever start spending more on services like it and Netflix.

[nathanm]

Now between streaming

If only Netflix's streaming wasn't significantly worse than DVD quality. (I've used it with a bunch of different devices, including Windows 7 Media Center; it never looks very good)

I'd love to be able to can Cox. My monthly bill is outrageous (although 35% or so of it is my Internet service).

[sgrizzle]

That's kinda pointless now, though, what with a gajillion inch HD TVs and sub-250 dollar PS3s and Blu-Ray.

You can rent blu-rays on monday at Reasors for like $2 and "back them up"

Backup != Lower Quality