Needham & Co., in case you were wondering, is a subsidiary of the Needham Group, a “nationally recognized investment banking and asset management firm”, so when these guys start talking money, it’s worth your time to pay attention.

Blockbuster Video, who we all know has been having a miserable last couple years, just released fourth quarter of 2009 earnings reports, and by every possible measure it sounds like a BLOODBATH.  They’ve got a one billion dollar debt load, commercial property that they can’t unload because the real estate market looks like twenty miles of bad road, competitors from every angle eating their lunch, and a whole new kind of format war emerging that they’re mostly unprepared for.

And Needham & Co. sees it even more pessimistically than I do!  Dig the word from Charles Wolf, analyst, via Benzinga:

“If they can’t build a profitable stores operation, then there is no Blockbuster. It’s real simple,” Mr. Wolf said. If traffic doesn’t pick up by mid-year, “we may just kiss this whole story good-bye. We got a dead-man-walking situation here.”

This is probably true.  Blockbuster can’t possibly build a kiosk operation from the ground up to compete with Redbox or an all-digital version to compete with Netflix while supporting the failing brick-and-mortar concept.  So unless Blockbuster finds a new revenue stream, and quick, they probably ARE just a dead man walking.