At a time when Redbox movie kiosks stand in front of most grocery stores and Netflix DVD envelopes fill enough mailboxes to put chain video rentals out of business, local video rental stores seem a relic of a former era – a time when you could run into the video store, with a take-out dinner cooling in the car, and a clerk would point you in the direction of a movie they think you’ll like.
But in Kalispell, two such stores have opened recently, and owners report that business is booming.
On the south side of town, Hometown Video has opened in the site of the former Movie Gallery along U.S. Highway 93, and on East Idaho Street, Video Plus is now open in the site of the former Stoick pharmacy.
“I think there’s a necessity for it here,” said Mike Larkey, who with his wife Connie opened Video Plus and, within a week, had more than 200 members. On a recent afternoon, customers filed in and out of the store, opening new accounts, dropping off movies and games, and browsing the aisles.
The philosophy behind these new ventures is basic, but could prove durable in these tough economic times: Offer low prices, customer service and variety in a way less personal video rental mediums simply can’t, because they’re not locally owned and run.
 |
|
Jonathan Massie helps out by putting DVD movies into security cases at the new Video Plus video rental in Kalispell. |
With three DVDs tucked under her arm, new customer JoAnn Lee said some of her friends don’t have credit cards, so they can’t set up an account or rent from Netflix or Redbox. And she prefers the experience of walking into an actual store, as opposed to tapping on a Redbox screen, while others wait in line for her to make a movie selection.
“I like coming in and physically touching the movie and reading the back,” Lee said. “It’s nice that there’s a store here in town that’s inexpensive.”
In January, the Oregon-based company Movie Gallery filed for bankruptcy due to steeply declining revenues and an inability to handle the debt it took on after acquiring the Hollywood Video rental chain. Two Movie Gallery stores in Kalispell closed shortly thereafter. Blockbuster Inc., headquartered in Texas, now teeters close to the same fate as it undergoes corporate restructuring. In Kalispell, the Blockbuster store on West Idaho Street closed in March after 10 years of business.
By most accounts, the downward slide of these formerly successful international movie and game rental businesses can be attributed to the popularity of Redbox kiosks, mail-order services like Netflix, streaming movies available on the Internet and the movies-on-demand options offered by most cable and satellite TV services.
But for the Larkeys and John King, who with his brother Gary and local developer Shannon Nalty, owns Hometown Video, the failure of the parent companies aren’t indicative of the Kalispell stores themselves not turning a profit. In fact, just the opposite was true.
“The former Movie Gallery location that we took over,” King said, “was very profitable, even with a much higher layer of administrative overhead.”
Upon the south side Movie Gallery’s closure, several people who formerly operated local video rentals approached Nalty and King, the developers of that shopping center, to open another video rental store at the location.
“That was kind of a tipoff,” King said. “Maybe there was something there.”
“We saw that all that demand wasn’t going to dry up overnight,” he added. “Being landlords of the building, we had a good idea of what the fixed costs were of the store.”
Both businesses bought up much of the movie inventory of the closing chain rental stores, and both new ventures also made the conscious decision to rely heavily on local expertise.
“We have given full control of decision-making to the staff to make the customer as happy and pleased as possible,” King said. “Those (Redbox) machines are not going to give anyone advice as to what movie to pick.”
At Video Plus, the Larkeys hired Mary Griffith, who formerly managed two Kalispell Movie Gallery locations, to run their new venture. Unlike her former position with a corporate franchise, Griffith said she appreciates the flexibility that a locally run, independent business provides, particularly when it comes to accommodating the viewing requests of customers and rounding out the video library with classics.
“We’re still ordering videos today that people come in and ask for,” Griffith said. “You have to root around those bins at Walmart – see if they’ve got Dr. Zhivago.”
Both businesses also touted how much more quickly the customer can see the movie they want to watch than with a mail-order service.
“We are not in Seattle or Denver, where things are mailed out for a distribution center on the other side of town,” King said. “It’s pretty hard to see more than one movie per week.”
Yet both Video Plus and Hometown Video have an eye on the future, as broadband access improves, making streaming movies through the Internet increasingly easy.
“In another four of five years I think video rentals may be gone,” Larkey said. “So we’re going to branch out a little bit.”
In addition to renting DVDs, Blu-ray discs and games, Video Plus plans to sell home theater and gaming systems, refurbished computers, video accessories and begin performing some computer repair and disc resurfacing. Video Plus will buy used games and offer store credit on their trade-in value. DVDs and games are also for sale, and the store features a lounge area with free wi-fi and coffee.
Hometown Video also plans to expand, but is waiting to see what works.
“We’re trying to get the basics right first and do a good job with the core part of operating the business, adding bells and whistles as we go,” King said.
Aware they’re not likely to put Redbox or Netflix out of business, however, Hometown Video and Video Plus believe they can fill a niche with video rentals that are distinctly local.
“We think we can successfully coexist with the kiosks and the subscription product,” King said. “We’re offering a different kind of experience and we think it’s a better one.”
Larkey agrees.
“The only way brick-and-mortar businesses are going to survive is if they can compete with the dot-coms,” Larkey said. “Really and truly they are, that’s the way of the world.”