This year's much heralded movie industry slump has been attributed to poor selection of good movies, and a theory that movie fans increasingly prefer to watch movies at home on video or DVD. But the home video industry is also in a slump, according to the Associated Press.
"Movie rental chain Blockbuster Inc. posted a quarterly loss Tuesday that was more than double Wall Street's forecast as lackluster new video releases failed to attract consumers," AP reported. "The largest U.S. home video and DVD rental company also said it was no longer on track to meet its 2005 financial forecast and said it has reached an agreement with creditors to waive certain debt covenants for the second and third quarters. Without the waiver, the company would have been in default, Blockbuster said."
Blockbuster lost a lot of revenue by eliminating late fees. The movie industry is now in its 19th week of decreasing audiences, which has spilled over into the home video market. Blockbuster officials say they don't expect the home market to get significantly better until the Thanksgiving-Christmas holiday season, AP reported.