The ratings on Blockbuster Inc. reflect its participation in the declining video rental industry, extremely competitive home entertainment market, dependence on decisions made by the movie studios, and highly leveraged capital structure. Blockbuster's rental revenues reflect the declining industry trend as the company generates about 74% of total sales from rentals. Standard&Poor's Ratings Services anticipates that sales growth will be flat to slightly down due to a drop in consumer spending; however, the low-cost nature of movie and game rentals and purchases may partially offset the drop in revenues. Additionally, people may be more predisposed to stay at home and view movie rentals and purchases as more affordable entertainment alternatives. Revenues were down 2.7% for the quarter ended
