Columbus video stores seeing success

Columbus video stores are weathering closures and boosting earnings, despite shifts in technology and consumer preferences.

Blockbuster Inc. will close 960 stores by the end of 2010, according to a September document filed with the Securities and Exchange Commission. Movie Gallery Inc., owners of Hollywood Video, will file for bankruptcy and close 1,000 stores, according to a Jan. 28 article in The Wall Street Journal.

Despite widespread closures, Columbus video rental stores are prospering.

“Out of our district, we’ve been No. 1 in productivity,” said Shawn Bugler, assistant store director for Hollywood Video at 6939 E. Broad St. “But 2 to 3 years ago we were in worse shape, when we had to cut man hours, store hours, and even close stores. Now there [are] far less stores being closed.”

Justin Williams, store manager for Family Video at 5540 N. High St., says the company continues to expand.

“We continue to open new stores,” said Williams. “But clearly [the rental business] is getting more competitive and that’s going to hurt.”

Offering unlimited DVD rentals starting at $8.99 a month, Netflix Inc., based in Los Gatos, Calif., has become the world’s largest rental subscription service. In 2009, Netflix expanded its customer base to 12.3 million, up 31 percent from 2008, and improved revenue 22 percent to $1.67 billion, according to a press release.

Steve Swasey, vice president of corporate communications for Netflix, said the company attracts customers with convenience and selection.

“It’s much more convenient to rent movies over the Internet and have them delivered wherever you want,” said Swasey. “We have over 100,000 titles and no late fees.”

Redbox, a Coinstar Inc. subsidiary based in Oakbrook Terrace, Ill., is a kiosk service that offers $1 rentals from over 22,000 locations worldwide.

In 2009, Redbox saw third-quarter revenue rise to $198.1 million, up 90 percent from the previous year, according to a Nov. 5 article in The Los Angeles Times. There are 50 Redbox locations within 9 miles of campus.

“Redbox has created an incredibly efficient business model,” said Redbox spokesman Chris Goodrich. “We’re able to pass savings on to the customer where other business models can’t because there’s more cost involved.”

To keep pace with the competition, Hollywood Video is focusing on value and customer service.

“Our entire collection is down to $1,” said Bugler. “But the actual in-store service has to improve to keep [people] coming back.”

Family Video attributes its success to the company’s business model.

“By purchasing our property, we limit the expenses,” said Williams. “We purchase movies outright through wholesale distributors and rent them out at $3 per night. By the end of the first month, we make money on the disc.”

In an effort to boost revenue, Blockbuster plans to roll out 10,000 kiosk locations by the end of this year, as well as developing the “Total Access” by-mail rental program, according to the company’s Web site. A spokesperson for the Blockbuster location at 2550 N. High St. declined to comment.

Despite solid numbers, local stores acknowledge that existing stores must adapt to survive.

“I believe that brick-and-mortar stores will definitely have a place in the future,” said Williams. “But I think that to survive in the distant future, they would have to have some kind of digital delivery, because in reality, DVD and Blu-ray has a limited lifespan.”

[This story ran online for The Lantern on Feb. 19, 2010. Click here.]

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