Back to its roots

Daniel
Daniel MacEachern
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Video rental being left to the little guys

There used to be a second cash register at the Video Plex in Torbay. Owner Scott Hartley said the previous owner used to do 10 times the rental business that he does.

"It was so busy when this industry started, that it would be nothing for him to do $4,000 in rentals on a Friday night, which is - oh my God, you wouldn't make that in a month now," he said.

Rogers announced this week it is getting out of the movie-rental business, following closures last year of Blockbuster Video outlets and the year before of Movie Gallery.

With the national chains calling it quits, the movie-rental business is being left to the independents and corner stores.

Even Jumbo Video has fewer than 20 locations across the country, and those are independently owned and operated, with several in Newfoundland. Local video-store owners say it's their personal involvement that's allowed them to stay open this long.

"The only thing that is keeping this alive is probably my relationship with the customers," said Hartley. "It's almost to the point now where it's only a weekend thing. It almost depends on the weather."

Dean Bearns, owner of Paradise Video, said while chains closing shop may mean more business for independent stores, it also has an effect on the public's perception of its entertainment options.

"If you see a video store on every street corner, automatically on a Friday or Saturday you might have a tendency to go to your local video store and rent a movie," he said. "Now, where there's only independents left, and there's so many different formats of getting this product, whether it's through illegal downloads or streaming through Netflix or streaming through Rogers or some other kind of provider, that does have an effect on the video industry."

Bearns acknowledges the industry isn't as strong as it used to be, but he doesn't think it will die entirely - in the same way e-books and music downloads haven't completely killed the demand for books and albums.

"There's still people selling books, and there's still people selling CDs, even though we know that there's different formats you can get them from, too," he said. "I'm leery about the business, to be honest with you. ... Business has dropped in the last three years in that type of format, but it has been stable."

Gerry Allan, owner of Allan's Video, said most owners have moved on to adding other services or products in an attempt to adapt.

"We haven't. Well, for years we had videos and computers when we were in our out-of-town stores, but mostly our main flagship store now is Elizabeth Avenue, and that's still strictly video. If you know something great to put in it, let me know, but I really don't want to get in the pizza business," he said, chuckling.

Allan said consumers are better off having a multitude of formats available to them.

"If any one person controls it all, as Blockbuster nearly did in video, then the products wouldn't be nearly as economic as they are today," he said. "Same thing with Netflix. They tried raising their prices last year, and there was a backlash and they lost a lot of customers."

Bearns says he plans to stay in the business, but is becoming increasingly careful about the inventory he buys for the store. He finds himself concentrating more on blockbuster new releases (and more copies of them) than smaller, more obscure pictures.

It's not just downloads and on-demand options that have hurt the rental industry, said Hartley, but deals with discount retailers such as Wal-Mart that allow them to sell DVDs cheaply.

"Wal-Mart has such buying power, they buy so many that people decided, 'Well, why should I rent for $5 when I can buy it for $15 and own it?'" he said.

A wider range of entertainment options has also cut into the market, said Allan.

"The biggest change in the video stores wasn't Blockbuster or Netflix," he said. "The biggest change in video stores is what does your 15-year-old do at 9 o'clock at night right now? They're on Facebook. The biggest market used to be 15 to 34, and it's not the 50-year-old, like I am. Yes, we watch the odd movie, but they used to watch movies a ton, that age bracket. And now that age bracket spends their time on the Internet."

Hartley said location is key for the small operations to survive, and the places that do best may be operations that offer more than just videos - he offers computer and information technology services, and has a secret weapon next door.

"Luckily, I'm attached to Mary Browns, so location is key."

Bearns said the movie-rental business is returning to its roots before the days of national chains of shops that stocked only movies.

"It took five or six years before there was any big contenders, before Blockbuster," he said. "Basically the industry started off as all independents. It started off as a mom-and-pop-type industry. And there won't be superstores, no more super video stores, but we'll keep our inventory at about 4,000 copies, and we'll keep it more current."

Allan says he's sticking it out for now.

"There's only so many times you can take a kick in the teeth before it's not really economic, but our sales have actually increased this year with the other stores closing," he said. "People still like that video store experience, and we find that out on a snowy day. Everybody seems to rush to the video store."

dmaceachern@thetelegram.com Twitter: TelegramDaniel

Organizations: Netflix, Blockbuster Video, Movie Gallery Wal-Mart

Geographic location: Torbay, Newfoundland, Elizabeth Avenue

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Recent comments

  • S
    April 22, 2012 - 15:44

    Holden, do you have any economic sense at all? In the article it says how business is down. How he used to do 4000 in rentals on a Friday night and now he's lucky to do that in a month. How exactly would someone create a job at a little over 20,000 a year (based on minimum wage) with business sales down over 300% (estimate). The reduction in taxes is the only thing keeping these small businesses alive. People in Newfoundland need to be supporting local business more instead of going to big box stores. You are the problem Holden, not the business models.

  • UseTobeVideo
    April 21, 2012 - 17:02

    Reduced our taxes? Not creating jobs? Please do your'e homework before making such a blatently false statement!!

    • Holden
      April 22, 2012 - 06:42

      You do your own homework there is nothing false in the comment!!!!

  • Holden
    April 21, 2012 - 09:10

    What's wrong with these owners we reduce their taxes and they won't create jobs. Looks like it's back to drawing board.