The Wall Street Journal
Even Before Blockbuster's Bankruptcy, In-Home Movie Options Battered Rental Shops
Blockbuster Inc.'s bankruptcy last week has made it official: Technology is killing the video-rental store—and a piece of American culture with it.
Alan Sklar feels it. The 61-year-old has stood behind the counter of Alan's Alley Video in Manhattan's Chelsea neighborhood for 22 years. Revenue is down, and his staff, which reached 10 a few years ago, is now about five. "If we pay the bills we're happy," he said.
Many nights, like last Thursday, are very quiet.
He lists the culprits. "Netflix, Redbox and on demand," he said, over Audrey Hepburn's voice emanating from a television in the corner playing "Funny Face."
"People like things being given to them. We don't see as many warm bodies."
Since the first video-rental shops emerged in the late 1970s, they have served as shrines to films and created new social spaces for neighborhoods, often reflecting their personalities. They drew cinephiles, rebellious teens seeking movies of which their parents might not approve, and budding young actors and directors who canonized them in their work.
The shops made accessible high quality films, or quirky or foreign ones, that weren't likely to be broadcast on TV—and on customers' own schedules. Brought down off the silver screen, movies were artifacts people could swap, study and recommend. A generation of movie buffs and cultural critics collected copies of films the same way art and books were amassed.
But new movie-delivery methods have made bricks-and-mortar stores obsolete. In 1998, Netflix started shipping DVDs to consumers at home. Cable companies expanded their on-demand movie offerings, making it easier to find a movie from the couch.
In 2007, there were 16,237 video-rental stores in the country, according to the latest data from the U.S. Census Bureau, down from 23,036 in 1997.
"The video store became inconvenient," said Joshua Greenberg, a program director at the Alfred P. Sloan Foundation, who wrote a book about the history of video stores.
It all began in the late 1970s. A few studios began releasing video cassettes and budding entrepreneurs—including George Atkinson—saw an opportunity. He opened Los Angeles-based Video Station in 1977, renting films to people who didn't want to own them.
Hollywood was leery, fearing that rentals of movie cassettes could eclipse sales of them, and tried to fight the video stores.
The market developed slowly because video cassette players weren't cheap. But as prices dropped, the market flourished, and by the mid-'80s, the country was full of mom and pop stores, with their own local flavors, from independent films to racy ones.
Shops such as Kim's Video in Manhattan's East Village became a home for a new generation of reference-spouting film fans. Patrons there and elsewhere came to love their quirky "dude behind the counter" keen to help them sift through what was new, good and suited to their tastes.
Quentin Tarantino spent several years working at a shop called Video Archives in Hermosa Beach, Calif., while writing his first screenplays.
"I got to be little Mr. Critic at the store, putting films in peoples hands, and arguing my points about why this movie was good and this movie was bad," the director told Charlie Rose in a 1994 interview.
Alan's Alley Video and others held on as the chains swept in. Blockbuster, founded in 1985, had thousands of stores and Hollywood Entertainment was chasing it. Boasting cheaper rentals than mom and pops, they played up their selection, not their expertise. Rental stores branched out beyond movies to videogames, music and mammoth cartons of Milk Duds.
Some filmmakers celebrated the rental megaplexes by writing them into their scripts.
One fan was Kevin Smith. In his 1994 release "Clerks," and its follow-ups, one of the main characters is a video-store clerk—a classic movie-obsessed slacker. Later, in his 2004 film "Jersey Girl," Liv Tyler plays a video-store clerk who meets a publicist played by Ben Affleck in the shop.
At its apex, the video-rental stores culture was seamlessly embedded into the era's top television comedy. In "Seinfeld," the character Elaine becomes romantically obsessed with an employee at a video store because his rack of recommendations closely matches her taste. The clerk turns out to be a 15-year-old movie geek.
Rental revenue at U.S. video shops climbed through much of the 1990s and peaked in 2001 at $8.37 billion, according to SNL Kagan, a research firm.
Blockbuster was flying high. Viacom Inc. bought the chain for around $8 billion in 1994. It made deals with the Hollywood studios and became the destination for consumers seeking new releases.
But as Netflix and cable entered the fray, consumers turned away from video stores and spent more entertainment time online, on sites such as YouTube and early services that streamed movies to computers. Automated DVD-rental kiosks have taken a bite, too.
By 2007, the number of video-rental shops in New York halved from its 1997 level of 1,206, according to census data. In Los Angeles, stores fell to 595 in 2007, down from 1,047 a decade earlier.
In 2010, physical rentals from U.S. video shops are expected to be down 56% to $3.65 billion, from the 2001 peak, according to SNL Kagan. In the wake of this week's bankruptcy filing, Blockbuster is expected to close a big chunk of its roughly 3,000 stores (a few years ago it had more than 5,800). Movie Gallery, the owner of Hollywood Entertainment, liquidated in February.
As video shops, like record stores before them, began to vanish, trips to Blockbuster or the corner rental shop were reserved for "old times' sake" or a novel date night.
"There is something wonderful about walking into a video store and seeing all the titles lined up on a shelf, said Mr. Greenberg. "You don't get that with an iTunes interface or a cable on-demand menu."
"Taking it in in one glance," he added, "is such an incredibly nostalgic thing."
As for Mr. Sklar, he said he wasn't surprised by the Blockbuster bankruptcy and is trying to look on the bright side. After a Blockbuster store in the neighborhood closed recently, he thinks traffic in his business has edged up. Still, he added, "There is no way to know" how long he will be around.
Last Thursday, George Heussner, who works for a film production company, swung by to pick up a DVD. He and his girlfriend wanted to watch a movie. "Sweet romantic?" Mr. Sklar asked him. A regular at the store, Mr. Heussner nodded and Mr. Sklar handed him "Letters to Juliet." Mr. Heussner said his girlfriend would be pleased.
Blockbuster Inc.'s bankruptcy last week has made it official: Technology is killing the video-rental store—and a piece of American culture with it.
Alan Sklar feels it. The 61-year-old has stood behind the counter of Alan's Alley Video in Manhattan's Chelsea neighborhood for 22 years. Revenue is down, and his staff, which reached 10 a few years ago, is now about five. "If we pay the bills we're happy," he said.
Many nights, like last Thursday, are very quiet.
He lists the culprits. "Netflix, Redbox and on demand," he said, over Audrey Hepburn's voice emanating from a television in the corner playing "Funny Face."
"People like things being given to them. We don't see as many warm bodies."
Since the first video-rental shops emerged in the late 1970s, they have served as shrines to films and created new social spaces for neighborhoods, often reflecting their personalities. They drew cinephiles, rebellious teens seeking movies of which their parents might not approve, and budding young actors and directors who canonized them in their work.
The shops made accessible high quality films, or quirky or foreign ones, that weren't likely to be broadcast on TV—and on customers' own schedules. Brought down off the silver screen, movies were artifacts people could swap, study and recommend. A generation of movie buffs and cultural critics collected copies of films the same way art and books were amassed.
But new movie-delivery methods have made bricks-and-mortar stores obsolete. In 1998, Netflix started shipping DVDs to consumers at home. Cable companies expanded their on-demand movie offerings, making it easier to find a movie from the couch.
In 2007, there were 16,237 video-rental stores in the country, according to the latest data from the U.S. Census Bureau, down from 23,036 in 1997.
"The video store became inconvenient," said Joshua Greenberg, a program director at the Alfred P. Sloan Foundation, who wrote a book about the history of video stores.
It all began in the late 1970s. A few studios began releasing video cassettes and budding entrepreneurs—including George Atkinson—saw an opportunity. He opened Los Angeles-based Video Station in 1977, renting films to people who didn't want to own them.
Hollywood was leery, fearing that rentals of movie cassettes could eclipse sales of them, and tried to fight the video stores.
The market developed slowly because video cassette players weren't cheap. But as prices dropped, the market flourished, and by the mid-'80s, the country was full of mom and pop stores, with their own local flavors, from independent films to racy ones.
Shops such as Kim's Video in Manhattan's East Village became a home for a new generation of reference-spouting film fans. Patrons there and elsewhere came to love their quirky "dude behind the counter" keen to help them sift through what was new, good and suited to their tastes.
Quentin Tarantino spent several years working at a shop called Video Archives in Hermosa Beach, Calif., while writing his first screenplays.
"I got to be little Mr. Critic at the store, putting films in peoples hands, and arguing my points about why this movie was good and this movie was bad," the director told Charlie Rose in a 1994 interview.
Alan's Alley Video and others held on as the chains swept in. Blockbuster, founded in 1985, had thousands of stores and Hollywood Entertainment was chasing it. Boasting cheaper rentals than mom and pops, they played up their selection, not their expertise. Rental stores branched out beyond movies to videogames, music and mammoth cartons of Milk Duds.
Some filmmakers celebrated the rental megaplexes by writing them into their scripts.
One fan was Kevin Smith. In his 1994 release "Clerks," and its follow-ups, one of the main characters is a video-store clerk—a classic movie-obsessed slacker. Later, in his 2004 film "Jersey Girl," Liv Tyler plays a video-store clerk who meets a publicist played by Ben Affleck in the shop.
At its apex, the video-rental stores culture was seamlessly embedded into the era's top television comedy. In "Seinfeld," the character Elaine becomes romantically obsessed with an employee at a video store because his rack of recommendations closely matches her taste. The clerk turns out to be a 15-year-old movie geek.
Rental revenue at U.S. video shops climbed through much of the 1990s and peaked in 2001 at $8.37 billion, according to SNL Kagan, a research firm.
Blockbuster was flying high. Viacom Inc. bought the chain for around $8 billion in 1994. It made deals with the Hollywood studios and became the destination for consumers seeking new releases.
But as Netflix and cable entered the fray, consumers turned away from video stores and spent more entertainment time online, on sites such as YouTube and early services that streamed movies to computers. Automated DVD-rental kiosks have taken a bite, too.
By 2007, the number of video-rental shops in New York halved from its 1997 level of 1,206, according to census data. In Los Angeles, stores fell to 595 in 2007, down from 1,047 a decade earlier.
In 2010, physical rentals from U.S. video shops are expected to be down 56% to $3.65 billion, from the 2001 peak, according to SNL Kagan. In the wake of this week's bankruptcy filing, Blockbuster is expected to close a big chunk of its roughly 3,000 stores (a few years ago it had more than 5,800). Movie Gallery, the owner of Hollywood Entertainment, liquidated in February.
As video shops, like record stores before them, began to vanish, trips to Blockbuster or the corner rental shop were reserved for "old times' sake" or a novel date night.
"There is something wonderful about walking into a video store and seeing all the titles lined up on a shelf, said Mr. Greenberg. "You don't get that with an iTunes interface or a cable on-demand menu."
"Taking it in in one glance," he added, "is such an incredibly nostalgic thing."
As for Mr. Sklar, he said he wasn't surprised by the Blockbuster bankruptcy and is trying to look on the bright side. After a Blockbuster store in the neighborhood closed recently, he thinks traffic in his business has edged up. Still, he added, "There is no way to know" how long he will be around.
Last Thursday, George Heussner, who works for a film production company, swung by to pick up a DVD. He and his girlfriend wanted to watch a movie. "Sweet romantic?" Mr. Sklar asked him. A regular at the store, Mr. Heussner nodded and Mr. Sklar handed him "Letters to Juliet." Mr. Heussner said his girlfriend would be pleased.
