DVD killed the Video Store

Steve Fesenmaier (fesenms@wvlc.lib.wv.us)
Wed, 19 Feb 2003 07:35:53 -0800 (PST)

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Arts Feature · Vol 24 · Issue 1159 · PUBLISHED 2/19/03
URL: www.citypages.com/databank/24/1159/article11068.asp
HOME: www.citypages.com

DVD Killed the Video Store

Your local movie-rental store, marked for death?

by Peter S. Scholtes

On the shelf at Nicollet Village Video, there's a note taped to the box
of Inferno, a 1978 Italian horror flick. It says the
movie contains violence against cats. "Do not support the mistreatment
of animals by renting this film!" it reads.

"The least I can do is respect it," says owner Chris Becker of the
message, which was apparently scrawled by some
customer. Becker says he hasn't seen the movie, but if the charges are
true, he sympathizes. "That's my best friend over there
behind the counter," he says, motioning to the red hound vegetating on
the carpet.

Becker scratches his beard. "The fact that this person went to the
trouble of sneaking in the store and taping that there, the
fact that they returned the movie instead of stealing it or setting it
on fire, I respect that. It says something about our clientele."

It also says something about the store. Becker, who looks like a
mountain man and sounds like an ashtray, might be the
rental-biz cousin of First Avenue manager Steve McClellan. He's just as
staunch an independent--there wouldn't be a dog on
the floor, or a note on the box, if he weren't. His shop's 35,000 VHS
titles include foreign films, documentaries,
pornography--anything you want. The 8,000-store Blockbuster chain,
meanwhile, is notorious for carrying movies that have
been specially reedited to earn an R rating. (For more on the
straight-washed version of Y Tu Mamá También, see "Mamá
Said Cut It Out".)

Still, I've recently found myself renting more at Blockbuster, where
videos might as well carry a note saying: "Do not support
the mistreatment of an artform by renting this film!" The reason is
simple: digital videodiscs. Village Video doesn't carry them;
Blockbuster does. And these days, that's all the difference I require.

Since last November, when Columbia TriStar announced that it had sold 11
million copies of Spider-Man on DVD in its first
weekend, the new era has felt like a fait accompli. Lorelai on Gilmore
Girls bought her parents a DVD player this winter; so
did I. And even as audio commentary tracks rapidly wore out their
welcome, the convenience of instant rewind didn't.
(Viewers are now recording their own homemade DVD commentaries for
download on the Internet--sort of the audio
equivalent of a note on the box.)

At first, DVDs seemed like a good deal for indie stores. Where VHS
rental tapes cost non-chains upward of $60 to buy from
distributors, DVDs are cheap: around $20. But while Blockbuster and
major competitors such as Hollywood Video and
Movie Gallery have expanded, local shops seem tangled in fast-forward.
Last year the holdings of bankrupt St. Paul-based
chain Video Update were bought by Movie Gallery--and that was the good
news. Video Update franchise stores closed, as
did Movies on 169, Showtime Video in Blaine, Silver Screen in Virginia,
and countless others. The small national chain
Premier Video closed operations in Hastings and Mankato. The Video City
stores are history. And a slew of Mr. Movies
outlets were closed, or bought out by Blockbuster. (Eight years ago,
there were 73 Mr. Movies franchise stores; now there
are 18.)

Meanwhile, two revered collections of classic and foreign videos
literally went up in flames: Home Video on Snelling burned
down two years ago, reopening in September with an expanded DVD section
but little of its hard-to-find older stuff. And the
West Bank's Intercontinental Video couldn't rebuild itself from last
year's fire, which destroyed an unparalleled selection of
foreign titles.

Even Discount Video, whose 15,000 titles are often impossible to find
elsewhere, feels the sea change. A longtime holdout for
VHS, the Hennepin Avenue shop has at last decided to make the switch to
DVD in Japanese anime (a genre released almost
exclusively on DVD). Then there's Village Video, which also plans to
start renting DVDs.

"I'm going to carry it for as long as it lasts," says Becker. "I thought
by now that DVD would already be superseded by
something more compatible with current television technology." He's
talking about high-definition television and DVHS, a
digital tape format that had major industry backing as recently as a
year ago. "The marketing has been so amazing about 'the
superiority of the disc to the tape' that I don't know whether tape will
come back."

Becker shares with many indie storeowners a skepticism about the new
format--and a reluctance to invest the capital required
to make the transition. A former singer in one of Minneapolis's earliest
punk bands, the Doggs, he compares the DVD
invasion to the advent of CDs. "We were told how much better they
sounded," he says. "But your ears told you differently:
Vinyl sounded better. And the only way they enforced the thing was the
industry stopped supporting vinyl. When somebody
lies to you every time they open their mouths, how do you believe any
word they say?"

Discount Video co-owner Chuck Hanson suggests that DVDs were devised to
kill the rental market altogether. "They want to
capture that money directly by selling the movie," he says.

He adds that the medium isn't exactly ideal for rental. "One reason we
are very reticent to get into DVDs is that they are easily
damaged, and a lot of them get thrown away," he says. "For these heavily
capitalized companies, it's just the cost of doing
business. But we don't have that margin."

Soon businesses will spring up to "resurface" damaged DVDs, Becker
predicts. And if the format is difficult to rent, it's
pointless to own: Most consumers don't watch movies again and again the
way they listen to CDs.

Still, the video arm of AOL Time Warner is aggressively pushing the DVD
as something to buy. According to Adams Media
Research of Carmel, California, last year's sales totaled $12.26
billion, while rentals came in at $9.92 billion. At their current
low prices, DVDs don't cost much more than my girlfriend's late fees,
anyway. And unlike the old days of VHS sales, there
isn't a "window" for rental shops before videos go on sale: Now you can
buy a DVD the same day it becomes available for
rental (though Blockbuster is lobbying the studios to change that).

"DVDs have ruined us," summarizes a former Mr. Movies franchise owner in
the northern suburbs, who prefers not to use his
name. "The plan going forward has been to sell DVDs new and compete with
Wal-Mart. But that's just not practical for a
small franchise."

In this dicey environment, rentals slipped 3 percent in 2002. And as I
write, the comedic void known as Sweet Home
Alabama is being heavily advertised in endless TV spots as a Valentine's
gift. But somehow, I suspect those stuck with that
DVD will wish they had rented.

The real question is, are stores going the way of VHS? Amid an explosion
of alternatives--satellite, broadband cable,
pay-per-view, illegal copies on file-sharing services like
KaZaa--Netflix now offers an Internet-based rent-by-mail DVD
service that Blockbuster has been forced to imitate. Last April Netflix
opened a local distribution office in Minneapolis, and
reports mailing 100,000 DVDs a month.

But Becker scoffs at the idea that online services could replace brick
and mortar. "How close is the future where every title in
here is available through a couple of mouse clicks?" he asks. "For that
digital future that everybody says is coming,
everybody's going to have to accept the model that Blockbuster is trying
to push, the idea that only 500 films came out last

In point of fact, more than 750 films came out domestically in 2002, not
counting many festival entries. But I can't help
wondering: How will even the most dedicated shops carry them all?

If you want to know whether independent video stores are dying, ask the
guy who picks over the corpses. Vil Vilinskis has
been in the business of buying and selling rental inventories since
1985. Back when he got started, it was a boom time for
small shops.

"You only had to have maybe 15 'turns' [or rentals] and you were making
money," he says. "New releases would stay on the
'new release' wall because the demand was high and the supply was low."

The result was too many businesses. "It was like the '50s, with the gas
station on every corner. Pretty soon the ma-and-pas
started to feel the squeeze."

Enter Blockbuster, the Exxon of video rental. Co-founded by a Florida
garbage magnate and eventually scooped up by
Viacom, the company was ruthless with inventory, forever ditching the
old model of keeping one copy of every release for
future rentals. The logic: Why rent Meatballs once a year for 99 cents
when you can sell it to a wholesaler for five bucks?

Blockbuster grew so powerful that it began making revenue-sharing deals
with major studios, which allowed the company to
carry more than a hundred copies of each title in stores with no
acquisition costs. Other chains struck up their own
agreements. But independent video stores were shut out. (The arrangement
has become the subject of an anti-trust lawsuit
against Blockbuster, filed in Los Angeles Superior Court on behalf of
250 independent video stores.)

Still, you'd think the DVD era would help independent stores capitalize
on their strength--namely, still having one copy of
everything. A shelf without 8,000 copies of The Wedding Planner is a
shelf with room for good movies, right? But despite
DVD's potential for opening the cinematic vaults, studios are slow to
replace old films on VHS. "They're putting it out so
piecemeal, it's going to take 20 years to get all this catalog on DVD,"
says Scott Prost, who owns Video Universe in

Vilinskis sees the back end of this dynamic. "I just bought out two
independently owned Video Updates in the Twin Cities,"
he says. "On the new-release rack, DVDs represented 60 percent of the
product, and VHS was 40 percent. In the catalog
section, it was 98 percent VHS and about two percent DVD."

What kills stores is having to pay the same old high prices for
tapes--maintaining an expensive back catalog while trying to
compete in new stuff. Prost says most small operations don't have the
capital for that, but he's managed by taking it
slowly--there are now 5,000 DVDs among his 30,000 titles. In addition,
Video Universe is buoyed by the one market
(besides imported films for immigrants) that the chains can't seem to

Remember, porn is the reason VCRs exist in the first place--buyers
pushed the technology at every step of development.
Now enthusiasts make use of an arcane feature of some DVD players that
lets you view scenes at multiple angles. The My
Plaything series (with Jenna Jameson and others) allows viewers to
choose what they want the star to "do," pushing movies
into the realm of the video game.

Not that Video Universe, Village, Home, and Panorama, and other
businesses are elaborate fronts for the adult room. GLBT,
foreign, black-and-white, African-American (a.k.a. "urban")--you can
find more of any of these genres at the neighborhood
stores. And the neighborhoods need these shops, which are often alone in
the industry for not requiring their customers to
leave credit-card imprints.

"I'm on my ninth copy of The Mack," Becker laughs. "Because the people
who think they're watching the lifestyle they want to
embrace think they're making some kind of blow against the empire by
stealing said tape. Prison movies are the same way."

Becker served time himself--two years for attempted possession of a
controlled substance. "I had a wife that was sick and
dying of MS," he says. "And I got talked into walking into a hotel room
in Eagan where the only guy that didn't have a badge
and a gun was me."

If the checkout clerks in blue shirts have a better story that that,
I'll eat my Panasonic.

Arts Feature · Vol 24 · Issue 1159 · PUBLISHED 2/19/03
URL: www.citypages.com/databank/24/1159/article11068.asp
HOME: www.citypages.com

City Pages is the Online News and Arts Weekly of the Twin Cities

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