Well, that didn’t take long. Hot on the heels of our story last week about Movie Gallery’s imminent insolvency comes the news that the Hollywood Video parent filed for bankruptcy this morning. The bankruptcy, Movie Gallery’s second since 2007, will be accompanied by the closure of 805 “poorly performing” locations.
The company acknowledges Redbox’s role in its decline, according to a statement made in court papers by Movie Gallery’s chief restructuring officer, Steve Moore:
“One of the most significant industry-wide factors affecting the company’s performance since the 2007 bankruptcy cases has been the cannibalization of rentals by DVD dispensing kiosks operated by Redbox which offer low priced rentals and convenience.”
It’s been interesting to see once-mighty chains like Movie Gallery and Blockbuster, who nearly annihilated the mom-and-pop video business in the 90s, become victims of obsolescence and shifting consumer preferences themselves. Where do we go from here, Insiders? Can relative upstarts Redbox and Netflix keep themselves relevant in a swiftly changing marketplace, or will we be writing their epitaphs in a few years?
(via the Dallas Observer)