How do video stores stay viable in a digital age?
It wasn’t too long ago that video stores were the place to be on weekends. Families hit them during school breaks. Customers would have long conversations with the movie-buff clerks.
That still happens, of course, but in the age of Netflix, Hulu, Amazon Prime and digital video recorders, the number of video stores has shrunk locally and nationwide. Blockbuster, once ubiquitous, announced in late 2013 that it was shuttering the last of its stores. Fellow mega chain Hollywood Video bowed out in 2010. Besides those stores, the St. Cloud area has lost Movie Gallery and Moovies, among others.
“I think people like the shopping experience and like to go to (a store), but I know in the Twin Cities they’re few and far between,” said Steve Pickard, owner of Movies Etc. stores in St. Cloud and St. Joseph.
Pickard’s St. Joseph Movies Etc./Malibu Tan location is closing at the end of this month after 12 years — partly because streaming and DVR use cut into business, he says, but also because of increasing overhead in a business that can’t expect customers to pay higher prices.
His St. Cloud store, a former Video Update that opened under the Movies Etc. name in 2002, is staying open.
Video stores, photo-developing shops, bookstores, music stores (with the exception of vinyl’s resurgence), and yes, newspapers are among the industries caught in a gray area between the traditions of the past and an all-digital future. One of the sticking points to a quick change: Plenty of people still use them, just not as many as in the past.
“People are always like, ‘You work at a movie store? Those still exist?’ ” laughed Alex Cash, assistant manager of Sauk Rapids Family Video. “Surprisingly yes, they do.”
Industry challenges
They do, but they face plenty of obstacles. The Internet has hurt video stores, but DVR is just as big a drain, Pickard said. It used to be that if there was nothing on TV, a customer would go rent a movie.
“Now there’s guaranteed to be something on TV” because the viewer recorded it, Pickard said.
According to Leichtman Research Group’s 2015 research, 62 percent of U.S. households that subscribe to a pay TV service have a DVR, and that’s up from 41 percent five years ago. Seventy-six percent of households had a DVR or Netflix, or used on-demand services, according to the study. Eleven percent used all three.
For the longest time, it was almost necessary to watch the latest DVD just to keep up at the proverbial water cooler, Pickard said.
“You went to work on Monday morning and everybody was talking about ‘Did you see this?’ or ‘Did you see that?’ ” he said. “Now that’s kind of faded.”
And there’s another major challenge — piracy. Pickard said he read that the smash Disney hit “Frozen” was downloaded illegally 35 million times. (Variety listed “Frozen” as the No. 2 pirated movie of 2014, barely behind Martin Scorsese’s “The Wolf of Wall Street.”)
“That’s an awful lot of rentals that didn’t get done, either through us or elsewhere,” Pickard said.
Wealth of knowledge
Owners, managers and employees of video stores bank on consumers’ desire for standout customer service — as well as product tangibility — to keep them renting instead of streaming.
Cash, who is 19, is a frequent customer at the Sauk Rapids store she helps manage. She said she streams some entertainment but mostly sticks to rentals.
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She said she believes a lot of people are like her — they like the experience of coming to a store, looking at the movie cases and being able to hold the movie, TV show or game.
“I know that reading books on an iPad doesn’t feel the same for me,” Cash said. “I’d rather have something in front of me I can physically see.”
And there’s that customer-employee rapport. A service such as Netflix offers suggestions based on a viewer’s last movie or show, but some fans prefer getting recommendations from human beings.
Video stores also claim an advantage in that they get newer releases a month or so earlier than Netflix’s disc-mailing service. They also tend to have multiple copies of a release, whereas a Redbox might run out of popular titles.
They also can carry a wider variety than some streaming services, such as classic movie selections. At Cash Wise in Waite Park, for instance, video store employees set up a display of Christopher Lee movies after the horror/sci-fi legend died last month.
Many video stores sell new and used DVDs. And going to rent a video is still an experience for some customers, complete with stores selling candy for one-stop shop service, said Rebecca Kurowski, communications manager for Coborn’s.
“It’s a great family activity,” she said.
Kurowski shared some general consumer trends about Coborn’s video stores:
•The action genre has overtaken comedy.
•Customers seem to gravitate toward particular actors. (The employees at Cash Wise said Julia Roberts, Anna Kendrick and Vin Diesel are favorites.)
•More customers are renting an entire TV series at once for binge-watching.
•Video game interest is starting to decrease, although some customers still want to try a game before buying.
One of those customers is Jordan Kilian, a St. Cloud resident who says he rents mostly games. He selected a Deadpool game at Cash Wise.
“I’m a cautious buyer,” he said. “I don’t want to drop 60 bucks on something I’m not going to enjoy.”
Making connections
Sauk Rapids Family Video has a display with employees’ picks for current movies. Cash counts Kevin Costner’s track team drama “McFarland, USA” as her top recommendation these days (“I tell everybody to rent that movie”), but she also loves comedies such as “The DUFF.”
“I love the regulars and getting to talk to people,” Cash said. “And movies usually are generally a happy thing, so it’s nice to see people raving about this new movie and getting to talk about that.”
Stefan Ahles, an employee at Cash Wise Video in Waite Park, is a big movie fan; he loves action, thriller and comedy flicks. He counts “Shutter Island,” “The Departed” and “A Clockwork Orange” among his favorites.
The video stores help keep some employees plugged in, too.
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“You really keep updated on the new movies,” said Nita Schneider, an employee at Cash Wise Video who started her job in May. She likes interacting with the regular customers, too — she shared a story about an 80-plus-year-old customer who, against her grandchildren’s advice, rented “Fifty Shades of Grey.” She later told Schneider she gave the movie a big thumbs-down.
Maybe millennial employees help draw more young people to the stores, or that’s at least the case with Sauk Rapids Family Video’s Cash and Cash Wise Video clerk Eric Magaw, 18. Both said their friends now come in the stores when they’re behind the counter.
What about one of the downsides of renting — late fees (or as Sauk Rapids Family Video calls them, “previous balances”)? Cash said her store tries to be low pressure about them and allows customers to put down a few bucks here and there. (And yes, both Cash Wise Video and Sauk Rapids Family Video have seen some “previous balances” in the triple digits.)
Coborn’s and videos
Most of the video stores in Central Minnesota are connected to a Coborn’s grocery store. The company phased out its video stores at Cash Wise East and Pinecone Road Coborn’s in Sartell.
“We are adapting as the needs change,” Kurowski said. “In some of our communities, video is still going very strong, so we’ll certainly not eliminate video if it’s something that makes sense there.”
There is a Redbox at the Cash Wise on the East Side. And the video space at the Pinecone Road Coborn’s is now used by Caribou Coffee.
“It’s been much, much more profitable for that particular location,” Kurowski said.
Coborn’s uses a financial formula to determine whether video is still viable at the individual stores. If figures drop to a certain level, the video store manager becomes part time. If numbers fall further, Coborn’s closes the store and reallocates the space to an in-demand service such as convenience, liquor, pharmacy or coffee.
“We make sure we have different positions available for our video store employees so they don’t lose a job,” she said. “We definitely work to make sure they have opportunities to stay on staff.”
Coborn’s has 30 video departments, with a half-dozen to a dozen employees at each, Kurowski said.
Tony Schnettler is the manager of Cash Wise’s video and photo departments and the lone full-time employee. He’s new to managing the video store, having taken on that responsibility in February, but he has been with Coborn’s since 1990.
“We have to adapt with the trends,” he said.
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Schnettler has definitely seen the hit the Cash Wise photo department has taken courtesy of the digital age. He estimates that it lost 60 percent of its business in 10 years. Still, there are photo customers who come in and order 200, 400, even 1,000 prints, he said.
Complementary businesses
Coborn’s video stores have an advantage because customers come in to buy food, then stop by the video store and rent a few discs. It also allowed Coborn’s to do some cross-marketing — a free rental printed on a Coborn’s grocery receipt might entice some customers to wander over to the video store.
Pickard of Movies Etc. said the tanning and video businesses are mutually beneficial. When video sales slump during times of the year, tanning offsets losses.
“We’re not unique in video and tanning,” he said. “Somebody figured it out somewhere that it was a good combination.”
Any tactic can help in an industry where vending machines rent movies for a buck, or where much of the merchandise is illegally downloaded. Hollywood itself also could be blamed, Pickard said, for not producing anything so spectacular to make customers clamor for it. (Movie theaters have their issues, too, with the number of people who went to them in 2014 at the lowest point in 19 years, according to The Hollywood Reporter.)
“I’m still looking for that magic thing out there that people want and people need,” Pickard said.
Follow arts and entertainment reporter Kate Kompas on Twitter @copygirlkate, or call her at 259-3620.