Strong worldwide brand recognition. Weak operating performance; Technology risks associated with video delivery; Highly competitive home entertainment industry; Dependence on decisions made by movie studios; and Highly leveraged capital structure. The ratings on Dallas-based Blockbuster Inc. reflect its participation in the extremely competitive home entertainment market, weak operating performance, the technology risks associated with video delivery to the end user, its dependence on decisions made by the movie studios, and a highly leveraged capital structure that results in very thin cash flow protection. Standard&Poor's Ratings Services believes performance will remain very challenged. Our concern is that Blockbuster will not be able to transform its business model over the near term, as we had expected, given the competitive pressures
