The Dish Network has announced it will close about one-third of all Blockbuster video stores. The company said it will shut 500 underperforming and unprofitable Blockbuster locations in the next few weeks, Reuters reported. That leaves only about 1,000 Blockbuster stores standing, according to MSN Money.
With more film and TV addicts renting from kiosks or accessing content via subscription video-on-demand services such as Netflix and Hulu Plus, brick-and-mortar video stores are losing customers, according to Home Media Magazine.
Dish acquired Blockbuster out of bankruptcy last year and introduced a Blockbuster-branded service that offers streaming video as well as DVD and video-game rentals by mail, MSN Money reported.
The company lost 166,000 net subscribers in 2011, but reversed losses to pick up a net 22,000 subscribers in the fourth quarter, after introducing the Blockbuster service, Reuters reported. Total subscribers rose to about 13.97 million, and the company’s fourth quarter profits increased 24 percent to $313 million.
“Obviously, we think [Blockbuster] had a positive effect on gross subscriber additions,” President and CEO Joe Clayton said, according to Home Media Magazine. “Blockbuster is a significant brand in the marketplace focusing on families and movies.”
"By introducing new Blockbuster-branded services, we've begun to turn the tide in subscriber losses while continuing to face increased competitive pressures," he added, Reuters reported.
With Blockbuster stores only generating an average of $1 million in profit per quarter for Dish, it’s likely that more store closings are on the horizon, according to MSN Money. In 2011, Dish’s overall profit was $1.52 billion.
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