Viacom are hoping to sell their 81% stake in Blockbuster Entertainment, making the video rental giant an independent company.

Said Blockbuster CEO John Antioco: “We believe Blockbuster will compete very effectively as an independent company and that separation from Viacom will enable us to better pursue our unique strategic vision and significant avenues for expansion.”

But what does the future really hold for Blockbuster? They managed to embrace the move to DVD admirably, but many see renting DVDs a dead end. It’s no secret that there’s a slowdown in the video rental business: consumers would much rather use video on demand (VOD) if they could, rather than trudge down to the video shop on a rainy Monday night to return that copy of Three Week’s Notice that you didn’t get a chance to watch. With broadband coverage improving, speeds increasing, and pay-per-view services flourishing, then Blockbuster’s customer base will rapidly diminish.

Even if they did reinvent themselves as a VOD company, they will lose an important part of their revenue – it has been speculated that as much as 20 – 30% of Blockbuster’s income is comprised of late fees, and you can’t charge those on a stream.

Hoover’s on Blockbuster

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