Silverscreen was a bold venture, well executed, but simply in the wrong sector at the wrong time. DVD retailing is moving inexorably onto the web, and the widespread availability of film downloads from next year will only accelerate this. No matter how good a chain's stores are, they will not be good enough to stop this seismic shift.
Administrator Kroll has a big job ahead finding retailers prepared to take over the stores as a going concern. Times will continue to be hard for mid-sized entertainment multiples, which have neither the real specialism that enthusiasts love nor the scale to compete with the twin-pronged attack from supermarkets and the internet.
But none of Silverscreen's rivals will be gloating too much. HMV will be too busy thinking about its takeover of Ottakar's after it was cleared by the competition authorities yesterday.
There's little doubt HMV will be back with another bid - the question is at what level. The 440p a share offered last September now looks hugely generous and the City view is that Ottakar's shareholders will not be lucky if they get anything over 400p.
Still, whatever level the offer, the shareholders will have little option but to accept it. This week's very poor trading figures from Ottakar's show how tough life is in bookselling - it has not become a bad company overnight.
Buying Ottakar's would increase Waterstone's leverage with the publishers and enable HMV Group to cut costs while increasing its number of stores. But even a deal of this scale is only a short-term fix, because high street book retailing appears to be in terminal decline.
The first task once the merger goes through will be to build a much stronger Waterstone's presence online, and really having a go at using the strength of the brand to grab some of its lost market share back from Amazon.
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