The retail company that introduced millions of Americans to Friday family movie nights said it will close its 300 remaining U.S. stores by early January next year. Its DVD-by-mail business will also be shut down by mid-December.
"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," said Joseph P. Clayton, CEO of Dish Network, Blockbuster's parent company.
"Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings."
Dish said it will retain licensing rights to the Blockbuster brand and its vast video library.
Dish said it will focus on expanding its Blockbuster @Home business, a streaming service available to Dish pay-TV customers. Blockbuster On Demand, the company's streaming service for the general public, will also continue to operate.
Dish Network bought Blockbuster in April, 2011 in an auction for $320 million as Blockbuster was emerging from Chapter 11 bankruptcy protection.
Dish's plan at the time was to leverage its more than 1,700 store locations to offer in-store rentals that would complement Dish's other video offerings. "Cross-marketing and service-extension opportunities" – possibly in-store promotions for Dish's packages - were also mentioned by Dish at the time of the acquisition.
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But running the stores proved to be tougher than Dish's management anticipated, as video lovers continued to flock to Netflix, YouTube and other startup streaming sites and cheaper kiosk rental locations.
Dish continued to close stores throughout the country. Its rental library was cut in half in the last year, down to 41.5 million titles as of June from 81.9 million a year earlier.
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