Hollywood Video Owners File for Bankruptcy

Movie Gallery, owner of Hollywood Video and GameCrazy stores, is once again filing for Chapter 11 bankruptcy and will be shutting down 805 stores - roughly a third of its total stores.

The company admitted that it just could not compete with Netflix, who offer Internet streaming and home delivery, and Redbox, who have a number of convenient kiosks that offer $1-a-day rentals that can be returned to any location. Movie Gallery previously filed for bankruptcy in 2007 due to the debt it took on after acquiring Hollywood Entertainment Corp. for $850 million two years prior.

In the past three years, Movie Gallery has had to shut down 2,400 of its stores, leaving just 2,600 still open. Despite this, their revenues continued to decline, with 2009 seeing them lose $546.3 million.

This news comes alongside Blockbuster's announcement that their own line of rental kiosks will be extended to include more than 100 new locations across Arizona's Food City and Bashas' supermarkets as it continues to regain the business it's lost to Netflix and Redbox, too. Blockbuster had also once considered purchasing Circuit City before its closure in an attempt to branch out its business and remain competitive before the retail chain went out of business.

Perhaps Blockbuster should focus on finally delivering those movies that I've had waiting in my queue for the past month now, before they end up like Movie Gallery, too?