Blockbuster Files For Bankruptcy

It's a Netflix world. Blockbuster has filed for Chapter 11 bankruptcy protection from its creditors.

Blockbuster Inc., once the dominant movie rental company in the U.S., filed for Chapter 11 bankruptcy protection on Thursday, after reeling from mounting losses, rising debt and competitors that have better catered to Americans' changed media habits. Blockbuster will continue to operate its 3,000 U.S. stores. But the move, long expected, marks the end of an era that Blockbuster and its gold-and-blue torn ticket logo helped establish – of Americans visiting video-store chains for the latest movie-rental releases. Increasingly, Americans are forgoing Blockbuster and watching movies via video subscription services like Netflix Inc., video on demand and vending machine services such as Coinstar Inc.'s Redbox.

The company is about $1.5B in debt, much of which is owed to the nation's largest movie distributors such as Walt Disney and Sony.