After years of losing money, Blockbuster Inc. is filing for chapter 11 bankruptcy protection.

The movie rental giant said it's in debt by $1.46 billion after having trouble competing with newer services like Netflix and Redbox.

Experts say this signifies a shift in the way Americans are consuming media. Visiting video stores is being replaced by video-on-demand through subscription or vending machine.

"After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model," CEO Jim Keyes said.

Blockbuster plans to keep its 3,000 U.S. stores open while they reevaluate and reorganize the company.

Analysts expect the Dallas-based company will eventually close hundreds of its stores, cutting some of its 25,000 employees. The movie-rental company was founded in 1985.