Monday, March 16, 2009

The last movie rental stores left standing

CNN Money: "NEW YORK -- The news this week that Blockbuster Video has hired advisors to explore "restructuring" options, which analysts say could include a bankruptcy filing, is bittersweet to the movie rental business's remaining indie stores.
They're likely to outlive the corporate Goliath that once crushed scores of smaller retailers beneath its blue-and-yellow onslaught of identical chain stores. But the same forces that seem to have doomed Blockbuster (BBI, Fortune 500) - mail-order DVDs and streaming online video - may kill off the entire industry.
John Koch, the founder of Cinema Revolution in Minneapolis, is fighting on all fronts to keep his business going. Sales started softening in the middle of last year, when high gas prices kept people from making the drive out to his store. To compensate, he moved to a new location in Minneapolis, with a higher rent but also a more diverse and artistic community. Koch hopes his new neighbors will better appreciate his selection of foreign and cult films; he also provides a haven for local filmmakers who need a venue to screen their movies.
"The move preempted some of the decline we started to feel in the summer when gas prices were high," says Koch. Still, sales are down 30% since January, a drop he attributes to the economy - and the Internet.
Seattle's Scarecrow Video is also battling a sales drop. "We got hit in triplicate, with the recession, Netflix and online streaming, and snow - the storm on the last two weeks of December killed our Christmas season," says Mark Steiner, a buyer for the store. "And what are we doing? You can throw a million ideas out there, and you won't get folks out of their homes. They're hibernating."
Like many of the video stores left standing, Scarecrow stocks its 100,000-title inventory with offbeat offerings not available through mass-market rivals. Steiner's staff tracks down obscure filmmakers who don't sell to distributors to negotiate a sales channel through his shop. If more Blockbuster outlets in Seattle close, Scarecrow may pick up foot traffic, but Steiner isn't looking forward to it."

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