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Movie Gallery to Pay Millions in Claims

Let’s give poor Blockbuster a little break and turn our attention to another failing rental chain, shall we? Movie Gallery, which recently filed for bankruptcy for the second time and has closed nearly half of its locations, will be paying $7.8 million in pre-petition claims to several major studios and a distributor.

According to Home Media Magazine, “the payments include partial revenue-sharing amounts due to Paramount Home Entertainment, Sony Pictures Home Entertainment, Universal Studios Home Entertainment, 20th Century Fox Home Entertainment and distributor VPD”.

The payments were authorized by a Richmond, Virginia court to help ensure continued shipments of titles to remaining Movie Gallery and Hollywood Video (owned by MG) stores. In total, the company is carrying more than half a billion dollars in debt, with $45 million of that owed to studios and distributors.

Both of the Hollywood Video locations near my home have recently closed and sit darkened and empty. How is it in your neck of the woods, Insiders? Any Movie Gallery or Hollywood Video stores still operating? Should we start a poll on this site as to which chain will go belly-up first, Blockbuster or Movie Gallery?

(via Home Media Magazine)

20 Responses to “Movie Gallery to Pay Millions in Claims”

  1. Visitor [Join Now]
    tinybrat [visitor]

    Movie Gallery/Hollywood Video will be gone first, followed shortly thereafter by Blockbuster. All Movie Galleries in my city and for a good 75 miles around are gone. They were here one day and gone the next it seemed. We only have one Blockbuster, so I figure it will be gone in a few months too. You just can’t survive with that kind of debt hanging over you, not unless you come up with a new gimmic to drive customers into your stores because obviously business as usual isn’t working. Not to mention, if you can’t pay your distributors and you can’t get loans from banks to provide working capital, you can’t get any new products in for your remaining customers, then what? No choice but to close the doors.

  2. Member [Join Now]
    MovieWatcherSupreme [moviewatchersupreme]

    In Winter Park, FL; I haven’t seen one open Movie Gallery and I have been all over the place.
    Which one will go first? Movie Gallery has my vote without question.

  3. Visitor [Join Now]
    Jenna [visitor]

    Movie Gallery was never (to my knowledge) been in my area. Hollywood Video closed a few years ago and the most convenient Blockbuster is closing.

  4. Visitor [Join Now]
    Willechill [visitor]

    In the last 2 years the one movie Movie Gallery and two Hollywood Videos in my area have closed. All we have left is one Blockbuster, and i was told one Blockbuster Kiosk, and it seems like on every corner is a Redbox, in which is not a bad thing.

  5. Member [Join Now]
    bandwith

    Saw someone at on a street corner with an “everything must go” sign at the Bradley Park, Columbus, GA location.

    I’ll stop in there for some closeout deals in the next few days. If they have a DVD kiosk available, I may buy it for personal use.

  6. Visitor [Join Now]
    Tracy [visitor]

    I live in Brunswick, Georgia. We have no Movie Gallery, but Hollywood Video shut down last week, and we have one Blockbuster left. I figure it will be closed soon too. In my home town of Jasper, AL Blockbuster shut its doors several months ago.

  7. Visitor [Join Now]
    Tracy [visitor]

    P.S. We have several Redbox’s in town also (at least half a dozen). As far as I know, we have only one Blockbuster box and that is at Publix. According to the Blockbuster Express website, they don’t even know we have a box here! (Brunswick, GA) And for $1 a night, I won’t ever go back to a movie rental store. The last time I did (over a year ago) it cost me almost $5 to rent a movie. I used Netflix till I was unemployed, but Redbox is definitely a better deal!

  8. Visitor [Join Now]
    will [visitor]

    I think there’s a real ‘going concern’ issue at the heart of the current Movie Gallery bankruptcy. Liquidation is probably the only way out for them this time. They tried shrinking under protection before, and their business has continued to deteriorate.

    I know that the bricks-and-mortar video store business model is declining, but I still think there’s a case to be made for a few hundred well-located stores around the country that cater to customers who want instant gratification coupled with a somewhat larger DVD selection than the kiosks can provide. Whether that’s Blockbuster or just the healthiest independents, I can’t say for sure.

  9. Visitor [Join Now]
    crazy_noodle [visitor]

    Within 2 miles of my home are 1 hollywood video (still open), 3 redbox kiosks, 1 blockbuster video (still open) We have lost the mom and pop video rental stores but corporate seems to be sticking around here. Of course i use netflix and redbox ;)

  10. Visitor [Join Now]
    Movielover [visitor]

    I live in Austin, TX all the Hollywood Video’s in the city of Austin are closing. I guess their keeping a couple open in San Antonio. The Hollywood Video’s here weren’t competitive at all on price they charged more for new releases and more for older movies than the Blockbuster and they had all these complicated rental plans. Once Redbox moved into the area(we have 6 within 1 mile of my house) they were destined to crumple i never saw anyone in there renting movies..

  11. Visitor [Join Now]
    Jo Anne [visitor]

    Local Hollywood Video is closing, and the nearest BB is 15 miles away, but I don’t rent from the evil BB. Plenty of Redboxes to pick from and of course, I love Netflix. Ooops, can I say there here?

  12. Visitor [Join Now]
    Mike's Video [visitor]

    Within a 15 mile radius, there’s 1 Hollywood Video still open and a closed Blockbuster location that recently got bought by mattress retailer. There’s a independent video store that went from 14 stores down to only 2 locally. About 10 redbox kiosks, 0 blockbuster express kiosks. With all this, I still run a video store that’s doing good financially, as a matter of fact I have been keening on the idea of opening a 2nd store (as recommended by current customers).

    So to answer Shane’s question, I vote with everyone else when I say Movie Gallery Inc. will be the 1st to die off followed by Blockbuster.

  13. Visitor [Join Now]
    John Small [visitor]

    Movie Gallery will not last the year. They will go Ch. 7.

    BBI will declare Ch. 11 bankruptcy either in the next couple of weeks or just after the July 4th weekend. They will restructure, trim debt and come out much leaner but stronger. They will be around another 5 years at least.

  14. Visitor [Join Now]
    Scuba diving chef [visitor]

    We had 2 Mom and Pops that closed a good 10 years ago where I live in a town in the Northwest burbs of Chicago, IL. The Hollywood Video in town has been in the stages of closing for a few months now, selling off everything. I used to go in there. I think one of the problems with them is they didn’t really require, at least at the location where I lived, to pay all your late fees before you rented another movie. I heard you could have $20 in fines before they’d ask for some, not all, of the late fees before you rented another movie. Thats a sure fire way to loose money! There are 4 RB kiosks inside the Jewel grocery store, one outside Walgreens, one in Walmart and one in K-Mart which is closing. Once K-Mart closes I don’t know what will happen to that Kiosk. I am a huge fan of RB, can’t beat a $1 per night and promo codes everywhere.

  15. Member [Join Now]
    bigmagic66

    here the movie gallery has already closed but theres another one in the town right next to us thats still open for now but last i looked they where going out also so I called them. And yes they are closing as well. When I ask when they will be gone they said they have no idea but they are doing a special 3 DVD’s/Movies for $18. But as far as I know its only they gallery movies. Now Hollywood Video there isnt one down here but last one i saw closed years ago in the city. So I think Movie gallery is going to be the first one to go

  16. Visitor [Join Now]
    ian [visitor]

    elwood indiana movie gallery closeing store only a few yrs old . now adding the still fairly new store to the rest of the empty buliding’s and houses in town

  17. Visitor [Join Now]
    DANIEL [visitor]

    We have 1 Hollywood Video (still open) and 1 Blockbuster (still open) and a mom and pop video store that rents for 1 a night and 1.50 bluray, and about 24 redboxes all over town. My vote is Hollywood Video is first to go. Movie Gallery shut down a while back. Oh and there is 1 blockbuster express about 20 miles from here (never rent there)

  18. Visitor [Join Now]
    CoachMcGuirk [visitor]

    Probably Movie Gallery will shut down first, based on the fact I’ve occasionally checked their site after randomly discovering an online forum elsewhere that alerted me to the fact MG/HV updates the closing stores on their own site. They were quietly closing stores in the Chicago area last year without warning(and certain online forums I checked last year confirmed it was unofficially occurring around the country), and the last Hollywood Video within the city of Chicago(ironically in the same neighborhood I live in) finally made the closing list in March. I noticed the only HV’s in the greater area not slated to close are in Kenosha, 2 in northwest Indiana, and several MG’s in the exurbs and far out suburbs. Noticed Rockford, IL interestingly still has 2 HV’s slated to remain open. After doing that check, I noticed right away another HV made the closing list in NW Indiana, as of today!

    Blockbuster at least isn’t closing stores as quickly, so they might have a few years left for brick and mortar operations. They do have one store remaining near where I live that’s been open for almost forever, and several within a 5 mile radius. Two BB’s closed last summer, that were in neighborhoods slightly outside of the one near me. Doesn’t matter though, I’d be very shocked if MG/HV doesn’t go completely out of business within 1-2 years(maybe I’ll dare say by early next year) tops, and BB will ultimately just become just an online, kiosk, and cell phone-based movie rental/distribution company without brick and mortar stores. Dunno about BB’s regular stores, maybe I give them 2-3 years tops till all brick and mortar operations cease?

  19. Visitor [Join Now]
    jaws [visitor]

    In 2 towns just SW of Houston, TX, the BB closed last fall, Hollywood a couple months ago, Movie Gallery last month … we only had one of each and no kiosks for any of them.
    Think there’s 7-8 Redbox kiosks around …
    I’m sure going to miss walking in and the employees knowing me, my tastes, and telling me, “You gotta rent this one! Y’all will love it!” AND be right about it! Or, start to rent one, and they say, “I saw this, and it was really slow/bad/subtitled, etc. … are you sure you want to get it this time?”

    There’s certain customer service you canNOT get from a kiosk or online service.