Blockbuster has filed for Chapter 11 bankruptcy, listing assets of $1.02 billion against debt of $1.46 billion. Is that all?

Blockbuster also says it has reached a deal with a group of bondholders on a reorganization plan and secured $125 million loan to finance operations. Apparently the U.S. operations will continue normal business while in bankruptcy. Only in America.

“To preserve its three-decade long developed brand value, Blockbuster seeks a restructuring that permits a significant deleveraging of its business so that it can move forward at the digital clip at which its industry and competitors are currently running,” Jeffery Stegenga, the company’s restructuring officer, said in a court filing.

Blockbuster, which has about 3,000 stores in the U.S., has been hurt by Netflix and other Video On Demand services, as well as Redbox DVD machines. In September 2009, Blockbuster said it would close up to 960 stores in the U.S. by the end of 2010, leaving it with about 20 percent fewer stores.

After it emerges from bankruptcy, the only debt expected to remain on Blockbuster’s balance sheet will be the $125 million loan.

With NetFlix, Blockbuster & Hulu battling it out, is a new YouTube contender in the digital movie and TV market?

When YouTube started rolling out TV shows and classic movies last year, people wondered what their next move would be. YouTube Movies just opened and it has hundreds of movies loading up as we speak.

“Obviously in the long-term, it will all be digital,” said Kevin Lewis, head of Blockbuster’s digital strategy. “The future is streaming,” said Steve Swasey, Netflix’s VP of corporate communications.

For both Blockbuster and Netflix, the future is digital. Blockbuster’s brick-and-mortar business is costing them serious cash, and its stores are rapidly shutting down. When did you last go and rent a movie? Old school!

Blockbuster’s by-mail solution, its response to Netflix’s service, accounts for just 2% of the market. Netflix boasts a 97% share.

Yet even with its success in the DVD-by-mail market, Netflix is hurting, it’s the postal service’s largest single customer, spending over $600 million annually in postage fees.

Both companies are already online: Netflix’s streaming service reaches more than 60% of its subscribers, and Blockbuster On Demand is becoming a worthy competitor to Comcast.

Today Netflix released its free app for the iPhone and iPod Touch, essentially a pocket-version of its popular iPad app. Blockbuster has also ventured into the app market, and now comes default on the Droid X.

Well let’s see how the story pans out…We say, Blockbuster you need a lot of good luck! You were a leader, although it now looks as though you are just a copy-cat.

24/7 Wall St. compiles a report of brands that are likely to disappear in the near-term.  To qualify, it’s expected that the brand will be gone by the end of 2011, or for its parent to be sold or go into Chapter 11.

Blockbuster: was the national leader in the video rental business for nearly two decades. Now it is contemplating Chapter 11 to eliminate debt. The company lost $65 million last quarter. Its revenue continues to fall rapidly as firms such as Redbox and NetFlix. Blockbuster rival Movie Gallery said in February that it would close all of its 2,400 U.S. stores. Blockbuster’s model of renting movies through physical locations has been destroyed by cable and satellite video on demand, DVDs via mail and dispensing machines. Blockbuster may still be around as a company that has movie kiosks and a small mail and Internet-delivered content business. But its brick and-mortar business is dead.

Dollar Thrifty: the car rental company, is for sale. Hertz is a potential buyer, as is Avis Budget. The number of vehicles that Dollar Thrifty operates at any one time is only 95,000 compared to 420,000 for Hertz. The firm’s customer base and some of its locations may be valuable, but Dollar Thrifty can’t compete with Avis and Hertz. A significant drop in business and leisure travel and sharp competition among the companies has already caused the creation of Avis Budget. Dollar Thrifty will be the next casualty of the industry’s consolidation.

BP Plc: The case against the BP brand is not so much that the company will enter bankruptcy. It is that BP may end up breaking into pieces for its own sake. This may be to put the liabilities for the Deepwater Horizon spill into a company that also holds escrow capital to cover the huge costs of clean-up and suits. BP may also want to separate its successful refining operations from its exploration business, or recreate an American- based company similar to BP America, which existed for two decades. A restructuring of BP would also allow the firm to take a badly crippled brand and give the oil operation a new name — much as it did when it changed its name from British Petroleum.

Kia Motors: is one of the two car brands of Hyundai of South Korea. It has always been a marginal brand. Its stable mate, Hyundai USA, has a reputation for high quality cars like the Sonata and Genesis. Kia sells “low rent” cars and SUV nameplates like the Sorento and Rio. The parent company will take a page from several other global car companies and dump its weakest brand.

Merrill Lynch: may have been acquired, but that will not keep it safe. In fact, quite the opposite is true. Banks and other large financial services firms have a habit of buying large retail brokerage houses and then changing their names. Shearson is gone. So is EF Hutton and Prudential. In the U.S. Merrill is now owned by Bank of America Corp. and the buyout spawned a number of scandals that kept Merrill’s name in the paper for weeks and did a great deal to harm its name with customers. Bank of America will follow a time honored tradition, and Merrill Lynch will become BofA Investment Management.

Moody’s: is more than 100 years old, but the reputation it built over those years is irretrievably lost. There is a chance Moody’s could be ruined by civil actions, four of which are pending, and by charges brought by the U.S. government. Overseas authorities may bring a number of actions against the company as well. Pacific Investment Management Co. and other institutional investors have talked about taking on some if not all the roles that the current rating firms play. Research houses like Alliance Bernstein could also take on some of those rolls. Part of Moody’s operation may stay alive, but there is not much left to salvage in the brand.

RadioShack: is one of the oldest retailers in the U.S. It was founded in 1921 and in the early 1960s was purchased by Tandy Corp. The Tandy name was used for some of Radio Shack’s retail stores. RadioShack is currently a takeover target. There have been rumors that the company may be taken private via a leveraged buyout or purchased by Best Buy, probably for its locations. Best Buy would certainly not keep the RadioShack brand because it is considered downscale and does not have the reputation for quality products and service that Best Buy enjoys. RadioShack has already begun to rebrand itself as “The Shack,” an indication that it knows the older brand is a burden.

Readers Digest: was once the most widely read magazine in the world. Last August, the company took its U.S. operations into Chapter 11 to decrease debt. It emerged from bankruptcy in February with $525 million in exit financing. Reader’s Digest as it is known in the U.S. will be gone.

T-Mobile: A merger with Sprint-Nextel has been mentioned several times. The combined company would have a customer base about the same size as AT&T or Verizon. And the transaction would probably make Deutsche Telekom a large owner of the combined operation. Another alternative would be a merger with Virgin Mobile. Maybe Deutsche Telekom will just change the firm’s name.

Zale: was founded in 1924 by the Zale brothers. It was one of the earliest retailers to offer the ability to buy items on credit. By 1980, Zale had revenue of over $1 billion. In 1992, Zale filed for bankruptcy and by the end of that decade, its revenue was $1.3 billion, about the same as it is today. Zale has been at death’s door for some time. Its market value is down to $48 million. Zale is also in a very crowded market that includes retailers as large as Wal-Mart. Golden Gate Capital recently put money into Zale to buy it time. New money may defer the point at which Zale goes under, but it won’t prevent it.

This is a CRAZY Story. Blockbuster announced this morning that it had signed a new deal with Warner Brothers to provide immediate availability of new Blue-ray & DVD titles from the studio. Huge slap in the face to Netflix. Are Warners crazy?

But this isn’t just an ordinary run of the mill licensing deal. This agreement gives Blockbuster a huge four-week advance over Netflix in releasing new films. Blockbuster has filed for Chapter 11 and Netflix are rocking it – grossing over $444 million last quarter in domestic rentals. While Blockbuster reported a net loss of $558 million last year. So what is up Warners?????

Netflix customers from today, will now have to wait until April 20th before they can even order the box-office hit ‘The Blind Side.’ So how will Netflix respond to this agreement? Very interesting stuff..