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HDTV Almanac - Movie Gallery Files for Bankruptcy
By Alfred Poor
HDTV Professor
Posted on February 8, 2010
Category: General Interest


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Last week, another bit of evidence appeared that supports the position that DVDs (and Blu-ray discs) should be put on the endangered list. Movie Gallery filed for Chapter 11 bankruptcy protection as it tries to find a way to deal with its growing debt. The company has more than 2,600 stores in the U.S. in the Movie Gallery, Hollywood Video, and Crazy Games retail chains. The company’s restructuring plan calls for closing 760 of those stores, or a bit more than a quarter of the total. The closures come on top of “closing several hundred underperforming stores across the country” according to the company press release, and that they “closing additional stores during the Chapter 11 process.”

This is the company’s second trip into bankruptcy, with the last one starting in 2007 and ending in 2008. According to an article in TWICE, the company had $1.4 billion in revenues for 2009, which sounds impressive until you stack it up against the $2 billion it collected in 2008.

Certainly it’s difficult to run a brick-and-mortar operation that competes with the NetFlix and RedBox juggernauts, but I also view this as the contraction of a market in general that is coping with alternate delivery systems for movies and other video content. The NetFlix streaming movie service and Hulu’s television episode delivery are sparking rapid growth of video delivery over the Internet. We still have a long way to go before the balance shifts from plastic discs to broadband connections, but the change is accelerating and this only makes the future for storefront operations such as Movie Gallery and Blockbuster that much more uncertain.

Posted by Alfred Poor, February 8, 2010 5:00 AM

Reader Commentary

See Forum Topic: HDTV Almanac - Movie Gallery Files for Bankruptcy (12 replies)
Feb 8, 7:45pm
I don't know... Hollywood was having problems before the download phenomena really began. If they were, I suspect all the stores in the chain were, too. The local Hollywood stores in my neighborhood (one near me, and one in a neighboring town) are both
Feb 8, 8:51pm
I am not so sure we are looking at an inevitable end of optical media just yet. I agree that rentals on optical media will lose a lot of ground to downloads and streaming, but I don't necesarily see downloads displacing blu-ray or even DVDs yet as an owne
Feb 9, 3:08am
It seems to me it was a year or 2 ago that I predicted the death of removable media.
Feb 9, 6:37am
That feeling of ownwershp is hard to rival with... I get that, but it has its limits. How many of you reading this bought movies on VHS tapes? When was the last time you watched one? Did any of you buy L
Feb 9, 12:41pm
They really pushed hard for us to to buy every piece of crap movie they ever released it seems. There might be 10 or less movies or series I would even want to watch more than once. With HBO, Showtime, Starz, Encore, etc. pay per view and on demand who
Feb 10, 7:11am
Did any of you buy LaserDisc movies? How's that working out for you? Well, my LDs still look good. Obviously not up to HD but many of them look as good (a few better) than some standard DVDs. And most
Feb 10, 7:27am
Film11, I'm glad to hear that your LD titles are holding up. My question isn't so much about how good they look, however, but how often do you watch them? I suspect that the vast majority of purchased movies -- whether it is VHS, Beta, LaserDisc, DVD, Blu
Feb 10, 8:02am
That is where I agree. With the LDs, I occasionally pull one out and fire it up for fun. I buy very few movies on BD (This year, I only bought three) because I just don't see how often I can watch the same movie repeatedly. The 3 I purchased, I know I'
Feb 10, 3:06pm
I would be surprised if more than a third were watched a second time, and for those that have been watched five times or more, I'd expect that we're well into the single digit percentages. I'm probably
Feb 10, 4:07pm
Great column and fascinating debate. Thank you for bringing up this interesting topic. I don't think it's all decided. There are many indicators pointing towards the death of optical, but some others seem not too. Let me elaborate:
Showing only excerpts from 10 out of 13, Read More

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About Alfred Poor

Alfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets.