Video stores’ fan base still strong in digital revolution

Melissa Westphal

Video rental stores may have already become as passe as ... well, videos.

These days, a credit card and an outdoor kiosk gets you a DVD. The latest movie releases can be ordered through a video game console. Local cable providers offer those same releases at the click of a button.

Those more convenient options are partially to blame for the “store closing” signs on some video stores — which aren’t evolving as fast as the movie rental industry.

But don’t write your neighborhood video store off just yet.

Rentals from kiosks, through companies like Redbox, grew from just 2 percent in 2007 to 6 percent in 2008. And the online subscription rental industry — like Netflix — continues to grow, according to the Entertainment Merchants Association, the home entertainment industry trade group.

But traditional rental stores still accounted for nearly 70 percent of the rental business in 2008, which means there is still plenty of demand for brick-and-mortar sites. There will just be fewer of them.

Blockbuster is closing about 1,000 stores as it embraces more digital movie offerings. Hollywood Video announced earlier this spring the liquidation of its remaining stores as part of a bankruptcy restructuring.

In some markets, that leaves Family Video as the remaining chain store. And the company is in “active growth mode,” having opened 50 to 60 stores a year in the last few years, and is scouting buildings soon to be vacated by the bigger chains.

“Their closures are a reflection of their strategic decisions, not the strength of the industry,” said Tim Reynolds, director of personnel for Family Video. “Perception isn’t always reality. We’re a long way away from the death of the video store.”

Reynolds said the big players took on too much debt by growing too fast. Family Video owns more than 550 stores in 18 states, and Reynolds said the company owns most of its stores and the properties where they are located.

Reynolds said Family Video’s strength has been strategic growth with an emphasis on maintaining good customer service and affordable deals, like $1 and two-for-a-$1 deals on older releases.

He expects the stores will be around for a long time.

“We think we provide such a great place for people to connect, for people to come into our stores and talk about movies,” Reynolds said. “We’ve very connected to our communities.”

Reach Melissa Westphal at or 815-987-1341.