Before we go further into how today’s successful video stores are surviving, a bit of history. The first video stores – and no one can agree on exactly who got there first – popped up in 1977, not long after the first home video distributor, Magnetic Video, acquired the rights to 50 titles from 20th Century Fox and released them on heftily priced videotapes. These initial video rental “clubs” were often incorporated into preexisting spaces like record stores and electronics dealers; as VCRs became more prevalent (from 1.9 million American households in 1980 to 64.5 million by the end of the decade), the standalone video store became ubiquitous.
Studios were initially reluctant to embrace both video technology and video stores, fearing both would take a bite out of theatrical revenues. But they quickly realized the afterlife their products could achieve in the home viewing sphere, and by 1987, revenue from home video had topped theatrical box office. Around that time, a video chain called Blockbuster was starting to explode; it grew from a single location in 1985 to 94 in 1987 to over 1600 stores in 44 states by 1991. Their strategy was simple: a uniform store design, with wide aisles, bright colors, and clean shelves deep with new releases (which the chain usually acquired via shared-revenue arrangements with video distributors – rather than buying those tapes outright, as their smaller competitors had to). Their full walls of the big new titles, explains Daniel Herbert in his invaluable history Videoland: Movie Culture at the American Video Store, created video stores that “operated like a contemporaneous movie theater, with ‘New Releases’ dominating and ‘opening weekends’ driving customers into the store.”
Competitors like Movie Gallery and Hollywood Video followed suit, taking down even more indie stores. But a disrupter was waiting in the wings. Since the dawn of the video store, additional rental fees for overdue tapes and discs had provided a healthy revenue stream for owners – and an irritation to their clientele. In 1997, a Blockbuster customer, annoyed by a $40 late fee for a VHS copy of Apollo 13, was inspired to start a mail-order DVD rental service. His name was Reed Hastings, and his company, Netflix, became the David to Blockbuster’s Goliath; customers liked the company’s convenience, deep well of titles, and subscription (rather than daily rental) model. Blockbuster, which had passed up an opportunity to buy Netflix for $50 million in 2000, would spend the rest of the decade clumsily trying to replicate their success, via their own mail-order service, an in-store subscription option, and later, a chain of standalone kiosks in the style of another new rival, Redbox. They all failed. When Movie Gallery, Hollywood, and Blockbuster closed up shop in the early 2010s, it felt like the end of an era.
The perception created by the fall of those giants wasn’t the only factor. DVD, which began to supplant VHS as the primary delivery system for home media around the turn of the century, was a less ideal rental product, mathematically speaking; new releases on VHS were priced for rental, at upwards of $100, but the immediate, low sell-through prices of DVDs (roughly $20) made serious film fans more likely to buy than rent. And there were plenty of retail stores – Best Buy, Wal-Mart, Target – that were more than happy to clear a few shelves for them.
Those still looking to rent could go to Redbox, which (as of 2014) boasted 44,000 kiosks in 36,000 locations – half the DVD rental market, and 38% of all movie rentals, including VOD (though even that cash cow seems to be on the decline). And, of course, VOD has taken a healthy bite out of the market; aside from iTunes, Amazon, and other providers of new and catalogue releases, there’s the ubiquitous Netflix, which introduced a streaming option in 2007 that came to consume nearly a third of North American downstream Internet traffic.
With so many ways to watch movies, it became harder to convince people to leave the house to get them. And in the process, some of our best video stores began to feel the burn.
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Excerpts from the forthcoming documentary World of Video. Michael Hull / Fifth Column Films
Because those big chains were everywhere, and their failures seemed to indicate the end of that era, casual renters might not have noticed the independent stores that were thriving alongside them. Seattle’s Scarecrow Video grew from humble beginnings – 600 tapes, rented from the back of a record store – into one of the most eclectic and enviable film collections in the world. According to Kate Barr, onetime store employee and founding member of The Scarecrow Project, original owner George Latsios opened the store in 1988 and built its collection with a “we’ll take anything” philosophy and an omnivorous appetite for obscurities. (“Somebody told him about this incredibly rare Japanese laserdisc, and he flew to Japan to buy it.”) That collection became world-renowned, and their most valuable asset. “If you walk through the door and you pull any random thing off the shelf, that one item doesn’t have any particular value,” Barr explains. “I mean, maybe by the IRS’ standards it’s worth 50 cents. But the value comes in the collection in its totality – seeing it as a whole and its significance as a whole. We have over 120 years of film history and cultural history represented. We have over 125,000 titles and we represent 129 countries.”
Down in Santa Monica, California, the store Vidiots grew from similarly humble origins to achieve local-legend status. Patty Polinger and Cathy Tauber opened the store in 1985, mostly out of frustration with what their local stores had to offer. “The selection was just so mainstream,” Polinger recalls, “and I read an article in a magazine about these other stores around the country, and they talked about these independent films and video artists, and all these more offbeat things. I was like ‘Wow, we’re in a film town and we don’t have any place like that.’ So that kind of got the idea going.”
Both stores’ wide selections of foreign films and obscurities helped them weather the storm of Blockbuster and the other chains – that, and a willingness to ride it out. But things started getting sketchy in the late 2000s, and by 2010, Tauber says, “we realized [that] if we don’t figure out another income stream and another way to make some money here, we’re gonna be gone.” A “Save Vidiots” campaign followed, and for purposes of charitable fundraising, they started a separate non-profit organization, “focusing on the community aspect and events and filmmaker talks and all that.” Those fundraisers helped, Tauber says, but it was “‘too little, too late’ because we were really in a downward spiral. We had all these ideas, but we had no money to implement anything or really do all the things we wanted to do as a non-profit. And by January of , we announced we were closing because we realized we were just going further and further in debt.”
And then an angel appeared – two of them, actually. Dr. Leonard M. Lippman, MD and film producer Megan Ellison, both longtime customers, stepped in to provide funding to keep the store going for two years. “Now we are moving forward,” Tauber says. “We just celebrated our 30-year anniversary.”
A similar problem, and solution, played out at Scarecrow. “Things had been pretty bad for about five years before they actually put out the call to help,” Barr recalls. But they did, in the fall of 2013, resulting in one of the store’s most profitable periods in years. “It was amazing response,” she says. “But the problem was that January came and everything dropped out again. So it was this very concentrated show of support.” It became clear that the only way to keep the collection intact – which was always their first priority – was to talk to a non-profit about acquiring it. And that announcement prompted Barr and two of her co-workers to decide that non-profit should be the store itself. They put together a proposal, which the owners accepted; the transition was funded by a successful Kickstarter campaign, with donations pouring in from not only across America, but around the world.
“We got a lot of support,” Barr says. “And in addition to just raising the money, what it also signaled to us is [that] this collection is significant enough to people who love movies that, even if they don’t live here, even if they can’t access it on a daily basis, it’s still important for it to be around.”
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Part of Scarecrow’s move from for-profit video store to not-for-profit film center was the addition of a screening room – similar to Vidiots, which put in a space for both showing movies and holding film classes in the early 2010s. But in Williamsburg, Brooklyn, a struggling video store found such add-ons were the deciding factor in their survival.
Wendy Chamberlain got into the video store business in 2003 – comparatively late. Videology was initially a regular rental store, and there was still plenty of juice in that business model at the time: “Our heyday was in 2005, 2006, 2007. Those were really, really good years for us,” she says. But around 2009, as the aftermath of the recession was settling in, “we really started seeing that something was going terribly wrong… we kind of hoped that the video store was a recession-proof business. And perhaps there used to be a day when video stores were somewhat recession proof, but now I don’t think that’s the case; I think what people did was, they did cut back on going out to movies, but they also cut back on renting. They went to Netflix; $7.99 a month, you know, that’s the cheapest option there is.”
She and husband James bore down and waited it out, figuring “we’d reach a plateau,” she recalls. But then “we reached a point where, even if we hit the plateau now, we can’t pay our bills at this point. So we started brainstorming – it’s a great space, it’s a great location. I’ve lived in Williamsburg for 15 years. I didn’t want to leave. It would have killed me to see someone else in this space doing something else. It was like, ‘We need to do something in the space. What can we do?’ And it actually took us a little while, but eventually we had the epiphany, ‘What if we added a screening room and a bar?’ Which seems now like the obvious solution.”
So they spent the next several months overhauling the business. What was initially two large rooms of rental shelves were compressed into one, as the back half was converted into a screening room; then the movies were moved into that room while the front was converted into a bar. Now they show films, hold events, host bingo and trivia nights for movie buffs, and serve as a hub for Brooklyn cinephiles and TV fans.
Oh, and they still rent movies. Though only a few hundred of their 17,000 titles are on the display shelves upstairs, customers can access the library via an online database (in the store or at home) and put in title requests by number, which employees then retrieve from shelves downstairs that have the look and tactile sensation of the stacks beneath a library. This setup eliminates Chamberlain’s favorite part of the video-store process, browsing the aisles and making discoveries (“We’re taking away the big thing that sets us apart from Netflix”), and the rental revenue is “practically nothing” (“We might rent to maybe five or six people a day. People usually rent more than one thing at a time, so might rent maybe ten to 15 DVDs a day”).
But the movies are still there, lending, if nothing else, symbolic value. “It used to be, we would rent, no problem, over a thousand [videos] a day,” she says, sighing. “Obviously, it’s very, very different. That’s kind of where we are now.”
You do what it takes to stay afloat. Some stores combine with other businesses. Some change the equation; across the river in Manhattan, midtown videophiles can use a service called We Deliver Videos to order rentals online, and have them delivered and returned.
But some stores, by virtue of luck or location or history, haven’t had to adapt at all.
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Which brings me back to Video Free Brooklyn. I wander the shelves, which are divvied up into mostly conventional categories, with a few wildcards (it’s early December, so there’s a prominent display for “Weird Xmas”), and mainstream titles sit next to the likes of the “Wildman” Steve vehicle Supersoul Brother and Sergio Martino’s Torso.
“I turned 38 last month, so I grew up smack dab in the timeframe where video stores were absolutely an important part of my cultural growing up and certain my film education,” Hillis explains. The selection here reflects that education; it’s curated, with no filler, which is good, because there’s no room for any — the store is all of 375 square feet.
Hillis was a customer before he was the owner, and hadn’t even thought of going into the video business until the “store closing” sign went up at Video Free Brooklyn a few years back. “I got excited about all the super-cheap DVDs I was gonna be stacking up,” he recalls. “And then maybe a week or two later, [the sign] came down, and I asked one of the employees what was going on. And they said, ‘I think somebody’s trying to buy the store.’ And I thought, ‘That’s really weird. Why would a failing video store seem like a worthwhile purchase? Unless it wasn’t failing.’”
Turned out, it wasn’t. “It was actually totally sustainable, but [the owner] was checked out. He wasn’t really a movie-lover. He just got into a business at a time when video stores just did well. This may as well have been a bodega for him.” So Hillis went in knowing there would be no big financial reward – but also no big risk. “It was sustainable from day one, the moment I took over. It’s not like I had to do something to try to get it into the black. I knew that I could always just sell the stock and that would be able to make it worth my time.”
But rather than sell that stock, he’s increased it – from 5,500 titles initially to his current collection of about 10,000. “And I know some places boast more than that,” he says, “but we’re 10,000 curated.” That, as far as Hillis is concerned, is the key. “It’s a boutique, and it’s not like this is a business model that could work anywhere.”
But it can work in a few other places. “Austin’s an interesting city,” says Vulcan Video store manager Bryan Connolly. “It’s not a huge city yet – it’s getting there – but it’s a big city that has big city things, and people have this mentality of shopping locally. I feel like most people in this town, are like, ‘I want to buy my groceries from the local grocery store.’…. And the same thing applies to movie rentals. Austin doesn’t just have two Vulcans, but there’s also two I Luv Videos, they’re an independent chain, and so that means this town still has four independent video stores and they’ve all done well. They’ve all been supported by the community.”
Vulcan is another early groundbreaker – in fact, founder Dian Donnell rented out film reels before videos were even available – and the loyalty of the community helped them wait out the chains. “I feel like anyone who lived near us would go here,” Connolly says, “and even if they didn’t, they knew that we had more movies. We still had more foreign movies and more weirdo stuff than a Blockbuster would carry.” They’ve seen the demographic shift – “We definitely had a point where college kids stopped coming in” – but that also has started to turn back around. “They realize, especially in this town where we have film programs and the Alamo and people are really hungry for movies, that if you want to watch everything by a director, you can’t rely on the Internet or computers. You have to actually rent. You may even have to rent a VHS tape.”
Thus, the combination of a favorable community and a Scarecrow-esque, everything-under-the-sun spirit has kept Vulcan going strong. (“We always kept the old stuff. We have everything. We still have the first tape that we bought. As long as they haven’t come out on DVD, we still have it.”) That community support has its limits, though – two weeks after our interview, that second I Luv Video location unexpectedly closed its doors. And one of San Francisco’s most enduring video stores, Le Video, folded in November. Maybe Hillis is right, and there are only so many places that will support video stores anymore.
“Again, I’m in Brooklyn,” he says. “I don’t necessarily think this store would work in the Midwest or someplace where there wasn’t a strong enough community of people who were just more up to date on art and culture and were seeking more than just the most expensive new releases coming in.”
Maybe he’s right. But Keith Hoogland might disagree.
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Hoogland’s father Charlie ran a wholesale business in the late ‘70s, and in 1978, he ended up with more copies of those initial Magnetic Video releases than he could sell to Sears and Woolco and his other customers. “We tried to get a price protection or send back the movies or get extended terms,” he says, “and they just wouldn’t do it, so we said, ‘We’ll just rent ‘em,’ and let people rent them.” And thus, the first Family Video store was born.
So the country’s oldest video store chain is also the last one standing – and not even struggling. As Blockbusters and Movie Gallerys folded across the country, Hoogland opened up more stores; there were 400 locations in 2004, and now they’re up to 777 in 19 states, most of them in the upper Midwest, plus Canada. “The video business is still cranking,” he says. “It’s not the same as it used to be. Redbox has taken a little bit. Streaming has taken some, and Netflix took some. But we got a big bump when Blockbuster and Movie Gallery closed; that brought us back up a little bit. So overall we’re a little bit down over the biggest days, but boy, when you go in our stores on Friday and Saturday night, we’re absolutely packed. People can’t find parking places. We’re still really busy.”
It’s an impressive story, but Hoogland won’t break his arm patting himself on the back. “It wasn’t that we’re so great,” he laughs. “It’s that our competition was so bad.”
“The video business really didn’t crater,” he explains. “Blockbuster was a very poorly run business; always has been.” The heavy debts accrued by Blockbuster and Movie Gallery were their undoing, according to Hoogland. But Family Video also outmaneuvered its competitors, as Daniel Herbert notes in Videoland, by owning rather than renting its locations, “putting the company as much in the real estate business as in the video business.” The buildings those chains inhabited were expensive, with steep rent escalations built into their leases. Family Video’s overhead basically stays the same.
And by staying a steady course, they’ve benefitted from the implosion of their competitors. “At the same time they were blowing up, I was having the best years ever,” he says. “All of a sudden you have towns across the country with no video store because Blockbuster and Hollywood Video closed, and now everybody thinks the video industry is no good, but around my stores… 2012 was my best profit year.”
There aren’t any Family Video locations in major markets, though they have multiple locations in suburbs of cities like Chicago and Detroit. That smaller-market cost and mentality has played a part in keeping the company going; their video store still feels like a community hub, and, lest we forget, there are still plenty of consumers who don’t have access to broadband Internet, or can’t afford cable, as well as older viewers who prefer physical media and don’t mind the trouble.
But Hoogland knows it’s starting to feel quaint. “People come into the Midwest and they’re like, ‘Oh my god, you still have a video store.’ That doesn’t help our business. That makes people who are going feel like they shouldn’t, and it makes the young people not come in. So our age demographic has definitely gone up some. We still get young people, but not as many, and so that’s what’s causing the strain. If Blockbuster and Hollywood were still here and we still had stores everywhere, I think we’d go out quite a ways further.”
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Excerpt from the forthcoming documentary World of Video. Michael Hull / Fifth Column Films
It’s easy to write off the efforts of these men and women to preserve the video store as acts of desperation, analog people in a digital world clinging to an outdated business model, their customers and partisans still floating off the resin of ‘80s and ‘90s nostalgia. But the video store isn’t just a throwback; it was vital, and still can be. “I knew that video stores were more than just a collection of movies,” Daniel Herbert writes in Videoland. “I knew that they were constituted by the interactions occurring in their aisles and over their counters. I knew that video stores and the people within them could tell an untold story about American movie culture.” The video store wasn’t just a retail space; it was where people made discoveries, took risks, happened upon oddities, realized what kind of moviegoer they were, and were going to be.
“I think it’s so many things,” Vidiots’ Cathy Tauber says. “Just spending some time in a video store, if you haven’t done it in awhile, there’s something so special about it, about the community aspect of people coming in and talking about movies. Of discovering new things, walking around, looking at something they wouldn’t necessarily think of that they want and getting recommendations from a real person.”
Hoogland agrees. “Video stores are a happy place to be in. It’s funny to say that, but it’s really true. Versus a grocery store, where you’re doing a chore; where ya gotta go there, you don’t want to go there, you want to get in there and out of there. This is a place where people meander, and they spend a little time, and they shop, and they’re looking at things, and they’re picking up movies, and they take their time. And there’s something to be said for that, in this busy world, somewhere there’s a place to slow down a little bit, in a good mood, and so we think of ourselves as part of an entertainment industry.”
Yet that simple act, of going to the video store and selecting your entertainment, has ramifications we’ve long taken for granted. Forget the generation raised on instant access online; even those of us who came up in the video store era have a hard time grasping the notion that, once upon a time, you saw a film in the theater, or at a revival screening, or on television, and that was it. There was no film ownership; there was no viewer control.
“One of my soapboxes that I get on when I get all passionate about talking about video stores is the great democratization of the home video movement,” Scarecrow’s Kate Barr explains. “We tend to overlook it, because we don’t tend to think of commercial-based enterprises in any political sense, to apply those political labels to them. But it really was this hugely democratizing movement, in terms of putting the viewing selection in the hands of the individual. Taking it out of the hands of corporations.”
Now, in a strange and altogether unexpected way, we’ve regressed – because the decisions of one corporation, Netflix, control so much of what so many people see. We’ve been down this road before (more than once), but it bears repeating: Netflix’s streaming library isn’t curated, and it isn’t programmed. (At times, it’s barely quality controlled.) It’s not based on providing the widest selection, or a cross-section of important, praised, or commercially successful titles. It’s based on one thing: licensing deals. And they’re quickly becoming a secondary concern.
“Netflix so does not care about film culture, because they found the original content game is more lucrative for them,” says Video Free Brooklyn’s Aaron Hillis. “So because of that they’re letting these licenses lapse, and now, if you want to watch great films of the canon, how do you see them? How do you watch The Godfather? How do you watch Citizen Kane? I’ll tell you right now: The works of Alfred Hitchcock are not on Netflix.” He’s right:
But maybe that’s for the best, Vulcan Video’s Bryan Connolly says. “It was weird when Skyfall came out [in 2012]. People were coming in like, ‘Netflix didn’t have any James Bond movies. I wanna watch one of those before I see this new one that’s out. That’s crazy!’ We also get that a lot at Christmastime, with customers being like, ‘Oh, they didn’t have Gremlins this time and that’s stupid. I wanna watch that.’ People are smart, especially people who really like movies and care about them, and they know that Netflix isn’t giving them what they want, completely. They’re going to have to have a video store if they want to watch everything they want to watch.”
So in a way, video stores benefit from those slender streaming libraries, since the limitations of those collections keep video stores in business. If you can find one.
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So the video stores that remain find themselves in a peculiar position: a symbol of the recent past, trying to hang on in the present. Unsurprisingly, many of their proprietors are thinking about the future. “Video store might just have to be treated more like a library,” Connolly speculates. “It may not be a thing that makes a lot of money, but it’s still an important resource that you need in your community.” Stores like Scarecrow and Vidiots are already making that transition, but Barr doesn’t see the future of the business solely in those terms.
“In the future, video collections will fall into two different camps,” she predicts. First of all, you’ll have “the smaller neighborhood stores,” which survive by staying “lean and mean. They keep a sparse collection, a smaller footprint, and that allows them to keep their overhead down.” And then you’ll have the larger collections, like Scarecrow’s and Vidiots’ – whether non- or for-profit, they’ll focus on keeping catalogue titles, obscurities, and independents circulating through their communities.
Hoogland likewise sees the regular video store getting smaller, even in his own chain: “The video industry is going to stay here for much longer than anyone else thought, but I don’t think that we need the square footage.” Videology’s Chamberlain can imagine a future like that as well. “I think that it can come back as a place that is all about browsing,” she says, “all about the deep cuts, not about new releases – you’ll always be able to get a new release somewhere online, and that’s fine. Maybe not 30 copies of the new release, maybe one or two. I wonder if, five years from now, someone will open a small, 500-square-foot place that’s all about curation of the collection, and the passion… Young people will start to discover it, and they’ll say, ‘Hey, you got to check this place out! They’ve got the craziest stuff.’”
In other words, the video store of the future could look a lot like Video Free Brooklyn. “A curated video store that has a staff of people who work in the film industry, I think there’s a greater need for that than ever,” Hillis says. “It’s come back around the same way that the smartphone killed the watch, and then Apple created the Apple Watch. It’s almost like this forward-thinking retro idea.”
Chamberlain concurs. “I think it needs to die in order to be reborn,” she grins. “At this point, yeah, video stores are becoming somewhat vintage, but there is a nostalgia for that even among people who’ve never experienced it for the first time. The people that are buying records today are not people that bought records back when records were popular. They have a nostalgia that’s sort of like a cultural nostalgia, not a personal nostalgia.”
So is the video store here to stay – even in its current makeshift, scotch-taped state? Hoogland should know; he’s been doing it for longer than anybody. “We’ve been saying since 1980 that the video industry is going to last at least another five years because we didn’t know, and we’ve been saying it for 35 years,” he chuckles. “But I’ll say this: I think we’ll still be here in five more years. I still say that.
“But I’ve never said six, so don’t read something into it.”