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Blockbuster UK Go Into Administration, OZ In Danger?

By Oonagh Reidy | Wednesday | 16/01/2013

Video rental chain has gone into administration

The UK retailer's 528 stores are in danger of closure if a solution is not found, but will remain open for now, reports The Guardian.

The collapse of Blockbuster in the UK marks the third casualty in a week along the British High Street - music store HMV and camera retailer Jessops are also in trouble.

4000 jobs are at risk if the video retailer shuts. Only Blockbuster UK is under administration, no other international entities, including Australia, are affected.

The popularity of video streaming services like Netflix, Amazon and other IPTV services readily available on Smart TVs are being blamed for Blockbuster's demise.

Its US parent filed for bankruptcy in 2010, and was taken over by Dish Network, although the UK entity was exempt from the filing. 

The first Blockbuster store opened in the UK in March 1989 in South London and in 2002, first introduced its online DVD rental service.

Blockbuster UK sells movies and games, both new and pre-owned titles.

Just this month it launched a new "exclusives' offer, flogging titles like Tinker Tailor Soldier Spy for rent before any of its rivals, after cutting a deal with Hollywood Studios.

However, it's too little too late, say analysts.

"Blockbuster's demise is inevitable," said UK analyst Ian Maude, Enders Analysis.

"Why would you go to a store for a frankly limited selection of films when you can browse Netflix for any film that's ever been released, or watch it on Sky or Virgin?"

Although the move has no immediate implications for Blockbuster OZ, its business model will inevitably be under scrutiny as it struggles against online competitors Quickflix, which has already run into financial difficulties, Big Pond Movies, Google Play, as well as Pay TV giant, Foxtel.

SmartHouse has contacted Blockbuster Australia and are awaiting a reply.

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