Remaining 300 U.S. Blockbuster retail stores will be closed as well as its distribution centers, DISH Network announced on Wednesday.

According to DISH Network, which purchased Blockbuster in 2011, the company will end all domestic retail activity and by-mail movie distribution by early 2014, letting its franchised and licensed stores open.

"This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment," said Joseph P. Clayton, DISH president and CEO. "Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings."

With the decision, DISH plans to lay off as many as 2,800 employees after it bought the bankrupt Blockbuster company for $320 million.

"(Blockbuster) The worst investment I ever made," said investor Carl Icahn in 2011, when he formed part of a group which bought the company in 2010.

By mid-December, the By Mail service will end and will serve existing customers until that time.