Video rental chain Blockbuster will file for Chapter 11 bankruptcy next month, according to the Los Angeles Times. The company has taken a severe hit with the rise of online services like Netflix and inexpensive rental kiosks like RedBox.

The company, with its 58,561 employees, intends to use the time to shed hundreds of its stores and restructure nearly $1 billion in debt. The Times reports that Blockbuster has lost nearly $1.1 billion since early 2008 and has closed nearly 1,000 stores since last year.

The pre-planned bankruptcy is believed to begin some time in mid-September, and if successful will lead to a major change in the current business model:

If it successfully exits bankruptcy, Blockbuster has told Hollywood studios, it hopes to grow through non-retail initiatives. Kiosk manufacturer NCR Corp., for instance, has already deployed about 6,000 Blockbuster-branded kiosks that, like Redbox, rent DVDs for $1 per night.

Blockbuster is working to make sure that Hollywood studio executives remain on board with the company through the transition. A constant, reliable flow of new titles is absolutely critical to the future of the company — especially if it wants to compete with Netflix and RedBox moving foward.