Grim news indeed if you have anything to do with Blockbuster beyond being a customer.
First, they went through bankruptcy restructuring, clinging on to less than $40 million in capital, which may sound like a lot, but not when you're facing nearly a billion dollars in debt. To make matters worse, now there is news that they will be delisted from the NYSE.
You can read more details in the link if you want, but what I wanted to share about this story is that even the mighty can be brought to its knees if it is unable to tame the debt dragon.
One could also argue that it's about business agility, which I can agree with, but if Blockbuster didn't have so much debt, it would still have time to evolve and grow.
Oh yeah, that and maybe karma. Late fees used to be Blockbuster's bread and butter, and as such, they didn't bend on the policy. I hated that though, and cheered Netflix when they will allow you to keep yours for as long as you want without late fees. Anyway, the late fee inflexibility may have been the double edged sword that gave Netflix a chance to break into the market.
But mostly, it's a cautionary tale about what debt can do to you if you are not careful.
First, they went through bankruptcy restructuring, clinging on to less than $40 million in capital, which may sound like a lot, but not when you're facing nearly a billion dollars in debt. To make matters worse, now there is news that they will be delisted from the NYSE.
You can read more details in the link if you want, but what I wanted to share about this story is that even the mighty can be brought to its knees if it is unable to tame the debt dragon.
One could also argue that it's about business agility, which I can agree with, but if Blockbuster didn't have so much debt, it would still have time to evolve and grow.
Oh yeah, that and maybe karma. Late fees used to be Blockbuster's bread and butter, and as such, they didn't bend on the policy. I hated that though, and cheered Netflix when they will allow you to keep yours for as long as you want without late fees. Anyway, the late fee inflexibility may have been the double edged sword that gave Netflix a chance to break into the market.
But mostly, it's a cautionary tale about what debt can do to you if you are not careful.
July 5th, 2010 at 02:07 pm 1278338834
July 5th, 2010 at 02:12 pm 1278339130
July 5th, 2010 at 03:26 pm 1278343617
Debt and greed, I suppose.
July 6th, 2010 at 06:52 pm 1278442340