Holy popcorn! Blockbuster to close up to 960 locations

File this in the horror section: struggling movie rental giant Blockbuster (BBI) said Tuesday it will close up to 960 stores by the end of 2010. If Blockbuster does hit that target, it will represent a 22 percent decline in the company's store count. Competitors Netflix (NFLX) and RedBox have flourished in recent months, but Blockbuster's massive fleet of cash-burning stores and its substantial debt load have made it impossible for the company to keep up.

Blockbuster had been pitching consumers -- and Wall Street -- on the idea that it could offer a unique value proposition by combining online and mail order DVD viewing with the convenience of renting movies in-store too. The problem? That benefit just isn't attractive enough to consumers to justify the cost of operating a chain of stores that are growing less relevant everyday. The decision to quicken the pace of store closings is an admission that this strategy isn't working.