Blockbuster files for bankruptcy in US
DVD and games rental company Blockbuster has filed for bankruptcy protection in the US.
The Dallas, Texas-based company said it had made the decision as part of attempts to cut its debts and restructure the business.
Agreements with its creditors will allow it to cut its debts from nearly $1bn to about $100m, Blockbuster said.
Blockbuster's non-US operations are not included in the bankruptcy, as they are legally separate entities.
That includes its 4,000-strong network of stores in the UK, Canada, Denmark, Italy and Mexico.
Blockbuster's 3,000 stores in the US will remain open for the time being, the company's statement said.
It has also secured a new $125m loan it says will allow it to keep working during the restructuring process.Competition struggles
"The process announced today provides the optimal path for recapitalising our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customers," Jim Keyes, Blockbuster's chief executive said.
Analysts say Blockbuster has struggled with the increased competition in the online rental market in recent years.
When it launched its own online DVD subscription service in 2004, it was already several years behind the US market leader, Netflix, which launched in 1999.
Other competitors have since entered the market, offering films and DVDs through postal delivery, vending machines and via online streaming.
Despite the competition, Mr Keyes said Blockbuster still had a great deal to offer.
"Blockbuster will move forward better able to leverage its strong strategic position, including a well-established brand name, an exceptional library of more than 125,000 titles, and our position as the only operator that provides access across multiple delivery channels - stores, kiosks, by-mail and digital," he said.