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Indies Struggle in Ever Shifting Rental Market

13 Feb, 2012 By: Chris Tribbey

Say studio windows could help add value to video

It was a good run for Alex Johnson and Vidiots Too in Jackson, La.

During the independent video store’s boom years between 1995 and 2005, Johnson fondly remembers working “shoulder to shoulder” with his wife, seven days a week, and keeping three of the stores open in the area. In his words: “We were slammed every single day.”

But after 23 years in business, Johnson closed the last store for good Jan. 31.

“I couldn’t compete with Redbox and Netflix,” said Johnson, who added he was spending $19 for a title through distributor Ingram, while Walmart would price the same at $14. “But I don’t blame it all on $1 movie rentals. The Internet has taken over so much of the time that used to be spent on movies.”

Now he wants his story to serve as a warning for other independent video store owners.

“They’re gonna have to do whatever they can to draw people in, whatever you can to keep them interested,” he said. “I didn’t do that.”

Independent video store owners nationwide are listening.

“There’s still room for us, just not as many,” said Gary Biehslich, owner of the W T’S Videos chain in southeastern Texas.

Biehslich and fellow indie owners offered a slew of examples of how they’re sticking around in a market in which $1.20 DVD rentals and cheap Walmart sellthrough discs have helped shutter most of the major video store chains.

“We constantly determine what our customers want from our stores,” Biehslich  said. “We have live personnel to answer our customers’ questions. We have ample new releases and an extensive collection of catalog titles.”

Jim Longtin, owner of Elite Video & Games in Fargo, N.D., said the toughest challenge for indie owners is the bevy of choices consumers have today, whether it’s online, on TV, in theaters or at other retail stores. For independent video stores, their biggest advantage is “social interaction,” he said.

“They want to chat; they want convenience,” he said.

David Chamberlain, owner of Video Plus & Tanning in Rice Lake, Wis., agreed that personal relationships between video store owners and customers are important, but the pricing of content at Redbox, Netflix and the like is proving almost too big an obstacle for a smile to solve.

“What they’ve done with Redbox is they’ve cheapened the product so much, it’s a disaster,” Chamberlain said. “The window is one way to put value back into sellthrough.”

Sellthrough windows are one thing several video store owners hope will help them stay afloat. Several studios have 28-day windows already in place with Netflix and Redbox, with Warner Home Video and Netflix agreeing on a 56-day window. Now Disney is mulling a 28-day window as well.

“Whether it helps sellthrough, who knows? But we support any effort that puts value back in the business,” said Ted Engen, founder of the Video Buyers Group, a consortium of more than 1,500 independent video stores.

He noted that now that Redbox has to go to retail to stock Warner DVDs — an agreement between the two that included a 28-day window ended Jan. 31 — indie owners have a leg up.

“None of the independents are having trouble getting what they need, but for Redbox, it’s a lot harder to get as many units as they need.” Engen said, noting that Redbox itself recently admitted it’s no longer competing to get titles day-and-date, but is focused more on beating the 28-day window studios have imposed.

Al Pufahl, owner of Video Escapades in Hammond, Ind., said that if the windows weren’t around, it would be “one more dagger in the hearts of independents.” But he criticized the studios for making deals with Redbox and Netflix in the first place.

“I think the studios can blame themselves,” he said. “Unlimited movies with Netflix for $9, Redbox for $1. It’s devalued the product, and it bankrupted the major video store chains. The only advantage we have is having a deep stack of new releases on street date, which Redbox can’t do [due to kiosk size].”

But Steve Pickard, owner of Movies Etc. in St. Cloud, Minn., said Redbox shouldn’t have too much of a problem fulfilling the needs of its consumers, even if it has to buy at retail.

“I don’t see how it helps us,” Pickard said, adding that the windows are the studios trying to make up for earlier mistakes. “It’s only a few titles that Redbox doesn’t get.”
Windows or not, Pufahl says part of the problem is a lack of new blood.

“Video stores need to have younger owners,” he said, noting that most are old enough to be grandfathers, and that some still refuse to give up their stock of VHS. “They need to be staffed by people who know what’s going on today in the industry.”

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