Blockbuster turning off the lights at its movie-rental stores

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The demise of movie rental giant Blockbuster marks the end of an era in home entertainment, as the company goes the way of the VHS tapes and VCRs that helped it bring Hollywood into American living rooms in the 1980s and 1990s.

It’s the final rewind for the once-dominant Blockbuster whose parent company Dish Network announced Wednesday it will close almost all of the 300 remaining stores early next year, shut down distribution centers and end the struggling DVD-by-mail service the company engineered more recently to compete with the likes of Netflix and Redbox.

Dish Network will turn its attention to the Blockbuster On Demand streaming service that will continue to offer more than 20,000 movies and TV shows on more than 15 movie channels, such as Starz and Hallmark Movie Channel. Blockbuster also will allow a handful of small business owners around the country to continue operating their Blockbuster franchise locations. But the company as consumers have known it will cease to exist.

“There’s nothing Blockbuster could have done to get people to keep renting movies,” said Jeff Kagan, an Atlanta-based technology analyst. “They became the most powerful video-rental business in the country, but they never really expanded beyond that.”

Blockbuster, founded in 1985, built an empire in the burgeoning video-rental industry, driving other, smaller video shops out of business. It successfully managed the transition from VHS to DVDs, but it couldn’t keep up as the industry moved toward video streaming and on-demand services.

As consumer tastes in the delivery of home entertainment changed, Blockbuster failed to keep up with the technological advancements driving the industry. Netflix swept in over the past decade with the original DVD-by-mail service that made it simpler for busy consumers who wanted to avoid a trip to the video store. Netflix later added video streaming, which gave it a further advantage over Blockbuster. Redbox also came out with its trademark movie kiosks. By the time Blockbuster finally caught up, it was too little, too late.

Blockbuster filed for Chapter 11 bankruptcy on Sept. 23, 2010, claiming $900 million in debt and mounting losses in its movie division.

“Today, we still watch movies, but we download them,” Mr. Kagan said. “You go download movies from Netflix, or Amazon Instant Prime, or Hulu. But you definitely don’t go to the stores anymore.”

Mr. Kagan called it the “passing of a generation.”

Trips to Blockbuster stores were once a staple of the weekend in middle-class America.

Blockbuster was part of America, it was part of every family,” Mr. Kagan recalled. “Baseball, apple pie, Blockbuster.”

“On Friday and Saturday nights, Blockbuster stores were jam-packed,” he added. “There were families of parents and children renting movies, always watching them at home on Friday nights. On Saturday nights, you got the teenagers that were there hanging out.”

Blockbuster held on longer than rival Hollywood Video, which closed its doors in 2010 when parent company Movie Gallery filed for bankruptcy.

Local movie rental stores still continue to feel the pain.

Potomac Video has dwindled from 22 stores in the Washington area during its heyday to just one remaining location in Chevy Chase, where video rentals have shrunk from 5,000 a week to about 1,500. The store stays alive by offering rare titles and foreign films to a niche audience that can’t find those same movies on Netflix.

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