While Blockbuster could benefit from the closure of rival video rental chain Movie Gallery, it got no relief in Q1, as the company swung to a $65.4 million net loss from a $27 million profit the year before. It’s clear that more nimble rivals like Netflix’s mail-order and download business and Redbox’s kiosks are taking customers away from the brick-and-mortar based Blockbuster (NYSE: BBI).
For now, the best Blockbuster can do is play catch-up. The company has been talking up its alliance with NCR in running 4,000 kiosks, and is increasingly experimenting with downloads, as a way of saying it finally gets where the business is headed. But those efforts will do little to help it make a dent in its huge debt, which has pushed it to the brink of bankruptcy.