Scrappy independent video stores battle against trend
Roy and Carol Williams have owned a video rental business for more than two decades, and in that time they have dealt with a flood of competitors most of which have since closed their doors the inception of Netflix and a storm of $1 movie rental kiosks.
Despite an always challenging landscape in which to make a buck, Williams and a small handful other video rental retailers have managed to hang on where others failed by offering low-priced movie rentals or by renting and selling niche movies, such as Spanish-language or pornographic videos.
Williams’ small 600-square-foot store on Lemmon Valley Drive is crammed floor-to ceiling with racks of movies, most of which he owns. He keeps costs down by avoiding advertising promotional materials include a few handcrafted signs pointing the way to 89 Cent Movietime Video for people driving north on Lemmon Drive.
Though the store’s revenues dipped as much as 50 percent during the depths of the recession, Williams says a number of low-cost promotions begun when $1 movie kiosks run by Redbox landed in Lemmon Valley supermarkets and convenience stores have spurred rentals in recent months.
“Sales are starting to come back, but I have great prices,” Williams says.
The low-cost promotions have created a base of repeat customers, and a contract with Portland, Ore.-based Rentrak Corporation allows 89 Cent Movetime Video to offer new releases nearly one month before they hit Redbox kiosks.
The closure of all Hollywood Video locations and possible closure of Blockbuster Media locations in northern Nevada, particularly the competing store at North Hills Boulevard, could further spur movie rentals and sales at 89 Cent Movietime Video.
“It has been difficult, especially when the recession hit,” Williams says. “It has not been easy when people are out of work and gas is up to $3 to $4 dollars a gallon. I have been keeping the doors open, but nothing is simple.”
In addition to 89-cent movie rentals and $2.50 rentals for new releases, Williams has a $10 card program that allows customers to rent several movies at once at reduced rates. A gift certificate program that offers bonus bucks such as $150 credit for $100 also has proved popular.
“That is to move the dollar,” Williams says. “I am looking for sales to go up once Blockbuster leaves.
Other movie retailers say sales of adult DVDs are the primary factor that allows them to keep the lights on.
Darnell Harris, owner of King Video on South Wells Avenue, rents DVDs but says sales of X-rated material far outstrips revenues from movie rentals.
He doesn’t contract with a movie provider and instead purchases all his DVDs to avoid having high overhead on the 800-square-foot store. Some movies he keeps for rentals, others he sells.
“That is what most small retailers do,” says Harris, who runs the store as a sole proprietorship. “The movies that I buy I own; I don’t have any debt with movie companies.”
In the face of fierce competition, Harris says he hasn’t raised prices in the six years he’s run the shop. And keeping overhead low, he says, allows him to focus on operational changes he can make to respond to a changing market.
“Most corporations should have seen it coming when they saw Redbox and Netflix, but instead of reinventing and taking advantage what they did is business as usual, and they saw a loss of revenue,” Harris says. “If you are a small business you can stay small and know when it is time to grow there is nothing wrong with getting big, but sometimes there are a lot of mistakes make when companies get too big.”
Miguel Reyna, owner of La Morenita Video on Wells, has long rented and sold Spanish-language films in addition to operating a Cricket Wireless store at 1450 S. Wells Ave. However, Reyna has done away with his movie rental business due to sagging revenues and the hassle of restocking and tracking inventory.
He’s selling off old movies for the same price as a rental, $1.99.
“It was taking a lot of space and I was not making money,” Reyna says. “Right now I am just trying to get rid of the ones I have. If I buy movies and just put them on the rack, once I sell it there is it not too much labor included in that.”
In addition to Redbox and Netflix, Reyna cites on-demand movie services from Charter, Dish Network and DirectTV and streaming movies over the Internet as reasons why the movie rental business failed.
“If they can get it at home, why have the hassle to come and rent it?” he says.
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