The death spiral continues. Blockbuster, the video rental chain that everyone loves to hate, announced on Tuesday that it will close nearly twice as many stores next year -- up to 960, or nearly 25 percent of its U.S. total -- as it had previously planned.
We shed no tears for Blockbuster here at HTWW. As Salon's Mike Madden so memorably wrote back in April:
Walking into a Blockbuster, even in its glory days, meant you hadn't managed to come up with anything more exciting to do that night than rent some mainstream Hollywood crap you somehow missed in the theaters. "Make it a Blockbuster night" may have been its marketing slogan, but somehow the vibe in the place made it feel like nothing more than a clever way to say "Admit defeat, loser."
Blockbuster's problems, in larger part, are of its own making. The company took on too much debt, and was slow to adjust to a changing technology landscape. As the L.A. Times' Ben Fritz reports, "In the second quarter [Blockbuster] lost $39.7 million and saw its revenue decline 22 percent while competitors Netflix and Redbox reported that their revenues grew 20 percent and 110 percent, respectively."
But even though I blog here not to praise Blockbuster, but to watch them continue to be buried, I can't help wondering what the slow painful implosion of the company augurs for the U.S. economy. Nine hundred and sixty more stores closing results in a corresponding number of jobs lost. Where do the store managers and check-out clerks and stockers go? Not to Netflix, surely, or Redbox -- the rent-a-DVD kiosk operator. We know, mostly from the work of Harvard's Lawrence Katz, that technological progress undermines the earning potential of less-skilled workers. The demise of Blockbuster and relative health of Redbox and Netflix are a few more data points to add to that equation. (And even those operations are bound to have a hard time surviving in an era of instantly downloadable on-demand movies.)
Blockbuster's failure to cope with changing times won't pummel the economy all by itself, but multiplied by a thousand other brick-and-mortar business failures -- bookstores, record stores, etc. -- that can't compete with Internet-scale efficiency and other technological-progress-induced competitive pressures, it all begins to add up. In an economic recovery that looks set to put all other jobless recoveries to shame, one increasingly has to ask, where will the jobs of the future come from?