Blockbuster bankrupt, but small video stores thrive

Blockbuster's bankruptcy doesn't mean the end of video stores. Small independents thrive by serving niches.

Robert Harbison / The Christian Science Monitor / File
In this 2003 file photo, George Johnson looks at titles at Eddie Brandt's Saturday Matinee, an independent video store in North Hollywood, Calif. Despite Blockbuster's bankruptcy, small video stores are finding ways to stay in business by serving niche audiences.

Blockbuster’s Chapter 11 bankruptcy filing yesterday is being characterized as the final nail in the coffin of the brick-and-mortar video rental business. And, while Netflix, Hulu and Redbox have done their best to render independent video rental stores a quaint anachronism, some Davids have survived where Goliaths typically rule.

Around the country small video stores, many of whom have long struggled against the video rental giants, are thriving even as one of the mighty oaks of the retail forest falls.

By practicing good customer service, finding a niche and staying focused on what they do best, these independent video retailers, some still renting VHS tapes, are succeeding in spite of the burgeoning online video business.

Building a business

“Blockbuster employees literally laughed in our faces when we opened our doors in 2000,” said Matt Martin, co-owner of Black Lodge Video in Memphis, Tenn.

But, 10 years and 30,000 movies later, Black Lodge is one of the biggest video stores in the Eastern United States and its business continues to grow.

The secret to Black Lodge’s success, said Martin, is that the store, which occupies a 3,500-square-foot house with a music studio upstairs, has focused on building a comprehensive film library rather than catering to the constantly changing tastes of the broader public.

“We’ve gone to a lot of trouble to build up a vast film library for movies that are out of print,” said Martin, who started collecting movies in the seventh grade with his business partner Bryan Hogue.

Whether it’s horror, science fiction, or foreign films, Black Lodge has them and continues to add to its collection. Its broad selection, especially of hard-to-find and out-of-print movies, attracts customers who know they will be able to find even the most obscure films at Black Lodge.

The company rents movies for $4 for five days and doesn’t charge late fees. Putting trust in its customers is part of the process of building a relationship with them.

“The honor system works better than you’d think,” Martin said. The mass text messaging the company uses to remind renters to return videos doesn’t hurt, either.

[Hoarding VCR’s? Black Lodge’s dream customer? For the stories we left out of the story, visit us on Facebook for the BusinessNewsDaily Backstory.]

Doing what you love

Others might not get rich in this line of work, but passion keeps them going long after the credits roll.

“I sacrificed a lot to keep this business going,” said David Buffa, owner of New York Video in New York City. “It certainly did not make me rich, but I was able to stay in business and do something I love. It’s not a job for us. We like what we do. “

Having a passion for what they do is one thing these entrepreneurs have in common. While the big guys were constantly updating their product mix and getting rid of the less popular titles to make room for high turnover movies, New York Video has focused on creating a breadth of offerings.

“We lost business to them initially,” said Buffa, because Blockbuster had so many more copies of each movie. “But, we would sacrifice having more copies of one title to get single titles of more obscure movies. We don’t get rid of anything. We’ve kept every title we’ve ever had,” he told BusinessNewsDaily.

The commitment to the business and the customers is what’s kept New York Video in business for 22 years.

The secret to survival? “Have the stuff people ask for and be able to answer people’s questions,” Buffa said.

Buffa also advises that small businesses—in any industry—to tailor its products and services to its customers’ preferences.

“Once I started to see what people were interested in I would focus more on those, which in our neighborhood was classic Hollywood and foreign films.”

Finding out what people want isn’t just good business, it’s good customer service.

“People really, really appreciate when you can answer their questions or when you turn them onto something new,” Buffa said.

Back to the future

While technology has made Netflix and other live-streaming services a convenient choice for those seeking instant entertainment, not everyone has embraced the technology. This has created an opportunity for retailers willing to take the road less travelled.

Movie Madness, in the small town of DeMotte, Ind., is thriving by renting and selling “outdated” VHS tapes and video games for discontinued game systems. While the company does its share of renting current DVDs, it also does a healthy business selling VHS tapes to folks who are still using VCRs.

“So many other video stores only have DVDs,” said Mary Holobowski, who has owned the store with her husband, Rich, for 12 years. “But we still have VHS tapes, and a lot of games for game systems they don’t make anymore. A lot of people can’t afford the new systems.”

Not only does the business make money renting tapes, it has created another income stream by selling VHS tape collections on commission. The company sells VHS tapes for a dollar each. It keeps 50 cents per tape and pays the owner of the tapes the other 50 cents. It’s a good deal for the buyer, the seller and for the Holobowskis.

Finding ways to serve its customers—even if it means renting a video or a game with nothing more than an IOU on a piece of paper—allows Movie Madness to build an ongoing relationship with customers.

“People still like that personal touch,” Holobowski said. “Being able to talk to someone and ask for recommendations is important. So many people are tired of dealing with big business.”


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