Blockbuster on Thursday filed for Chapter 11 bankruptcy protection. The move will reduce the company's debt from nearly $1 billion to an estimated $100 million, Blockbuster said.

"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 to meet the evolving preferences of our customers," Jim Keyes, chairman and chief executive of Blockbuster, said in a statement.

The bankrupcty proceedings affect Blockbuster and its domestic subsidiaries. Non-U.S. operations, as well as domestic and international franchises are not included in the filing. Blockbuster, however, will no longer continue its operations in Argentina, where the company has experienced "continued shortfalls," it said.

All Blockbuster stores, DVD vending kiosks, as well as its DVD mailing and digital download business will remain open, though Blockbuster said it will evaluate its stores at a later date "with a view toward enhancing overall profitability." Rewards program benefits, coupons, and gift cards will still be honored, Blockbuster said.

The move comes one day after rival Netflix expanded its business into Canada.