Bye Bye Blockbuster, Hello Streaming Netflix

BlockbusterThe hour's-a ticking-down for Blockbuster. The movie rental retailer has run out of money and needs more in order to come up with a restructuring plan, but can it ever really be relevant again, or profitable?

Blockbuster did just get another extension to file -- it was supposed to do so in September -- and now has until Feb. 4. The company is supposed to reduce its debt from around $1 billion to a mere $100 million, but given market trends it's difficult to see how that's possible.

Rental kiosks from the likes of Red Box are now more popular than stores, and streaming video rentals directly to your home's TV or computer is on its way to be coming the norm, given that nearly all the TVs on display at the Consumer Electronics Show this year had some kind of Internet connectivity -- either embedded or available as an add-on. There are set top boxes like Apple TV, Roku and Boxee that deliver content via the Internet to the living room, and more U.S. homes have video game consoles than cable boxes, most of them connected to the Internet and ready to stream movies.

The real winner in all this will be Netflix, not Blockbuster.Blockbuster has closed more than 1,100 stores in the past two years, and many more will go away before the restructuring is over. Eventually the discs themselves will too as we eventually adopt Internet-enabled TVs. It won't be overnight, there will likely be a decade-long transition, not unlike the one to digital TV, given how big the installed base of existing TVs is. But access to hard copies of movies will become increasingly limited.

For Blockbuster to carve out its niche now is too late. Netflix owns this channel and any other retailer looking to participate, even Walmart which bought Vudu last year, is at a disadvantage.

Time is certainly ticking away for Blockbuster. If it goes away, will you miss it?
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