Report: Blockbuster bankruptcy expected next month

After hanging in there as Blockbuster stores across the country were shuttered, the company has decided to file for bankruptcy, according to a report on Thursday.

The L.A. Times cites sources as saying Blockbuster will file as soon as the middle of next month. Word leaked out as a result of talks between the company and major movie studios. 

Blockbuster has nearly $1 billion in debt and wants to get out of leases on around 500 of its nearly 3,500 stores, according to the report. Nearly 1,000 locations have been closed in the last year.

The fall of Blockbuster reflects "consumers’ rapidly declining interest in renting DVDs from retail locations now that they can rent them from ubiquitous kiosks in grocery stores, in the mail, or via the Internet," says the report.

"Maintaining the support of Hollywood's film studios during the process will be critical so that Blockbuster can continue to rely upon an uninterrupted supply of new DVDs," it adds.

Plans to move move forward? Expand its presence in digital distribution, but a strategy is not set in stone, the report says.