It’s nearly 7 p.m. on a Tuesday snowy night and UPS employee Brad De Vries has finally gotten home after a long day at work and driving through the hazardous winter conditions. He realizes he’s wanting some movies for the upcoming weekend, but doesn’t want to go back out into the cold now that he’s finally home and resting.
Instead, De Vries heads to the computer and orders two new DVDs from Netflix; an internet movie rental website.
“I actually was told about Netflix by my Mom last year after complaining to her about never being able to see any new movies that came out on rental,” De Vries said. “Netflix is just easier than going to the movie store because I’m too lazy to do anything after work.”
Netlfix started business in 1998 and has been growing ever since. Netflix states on their company web page that they had one million subscribers as 2004 came to an end, and 5.6 million subscribers by the end of 2006. In only two years, there has been a dramatic increase in business.
Due to the popularity of Netflix, Blockbuster video started an online video rental service at the beginning of 2005 according to their web page. As a result of the popularity of online rental, smaller rental stores feels they are being pushed aside and losing business.
Douglas Redding, the video store manager of Liberty Hall video in Lawrence says his company is doing its best to compete with huge video rental companies such as Blockbuster and Netlfix.
“We do our best to compete with Blockbuster and Netflix,” Redding said. “When Blockbuster started their ‘no late fee’ policy,’ we introduced the same thing here. When the popularity of online renting began, we started that too.”
Despite using the same business techniques as its competitors, Liberty Hall video began to lose money.
“As far as online renting, we would get scratched or chipped discs back a lot and then the movie would be no good,” Redding said. “We spent a lot of money replacing them.”
Liberty Hall video also got into some big trouble with customers in early 2006 after a controversy with their late fee policy.
“We offered the ‘no late fee’ policy like Blockbuster did but there was a loop hole,” Redding said. “After a month, if a customer didn’t return the movie, there was a 10 dollar re-stocking charge and people were getting pissed off because they were unaware of the charge.”
Unlike Liberty Hall video, Movie Gallery, which is a slightly smaller video rental store than Blockbuster, is one of the few places that has chosen not to get in on the online rental business.
Bryant Larimore, the manager of Movie Gallery on 6th street in Lawrence believes online renting service could bring both good and bad effects, just as Blockbuster and Liberty Hall video have experienced.
“I’d have to see the economic profit from it,” said Bryant Larimore, the manager of Movie Gallery on 6th street in Lawrence. “I could imagine the headaches.”
Unlike Liberty Hall video, Movie Gallery is feeling positive about their business. Larimore says the Movie Gallery in Lawrence is doing better than it has in recent years.
“Jan. 2007 profits were better than any single months profits of 2006,” Larimore said. “I feel like this store in particular has improved dramatically.”
Instead of appealing to online customers, the Movie Gallery in Lawrence has chosen to focus on its most popular type of customers, college students.
“One-third of Lawrence is made of college students,” Larimore said. “This Movie Gallery is trying to appeal to that audience. We offer Wednesday night ‘buy one, get one free,’ specifically for college students. Every 13th rental is free.”
Larimore admits profits aren’t as big as Blockbuster, but they are steady. New releases are $2.99 for five nights and old releases are only $1.99 for five nights. Larimore believes customers will take the bargain going to the store over paying more online.
KU sophomore Joshua Barton is an avid renter at Movie Gallery and agrees with Larimore.
“I rent at Movie Gallery because it’s convenient and cheap,” Barton said. “I have to go over there, but I’m saving money doing that than renting online and I don’t have to wait for the movie to get here, so who cares?”
While bigger businesses like Blockbuster and Movie Gallery still seem to be doing good, smaller rental stores are getting hurt by more than just online renting.
“The Weinstein Company, a production company of Mirimax films, just signed an exclusive 4 year deal with Blockbuster to only allow their films to be rented there,” Redding said. “So when films like Bobby (a film starring Anthony Hopkins, Lindsay Lohan and Demi Moore about the assassination of Bobby Kennedy) comes out, only Blockbuster will carry it. So all our customers will have to go to Blockbuster for the movie if they want to see it.”
Redding says Liberty Hall video might be losing business to bigger rental places like Blockbuster and Movie Gallery, but is fighting to get all the movies they can get these days.
“We made our kitten by being one of the only places carrying Indie films, which are now carried everywhere,” Redding said. Now, companies are starting to do business with only big companies like Blockbuster, like the Weinstein company.”
Despite his company’s business issues, Redding believes all movie rental businesses will start to struggle in the near future because of technology.
“At this rate, all video stores will be gone in the next 10 years,” Redding said.
While Redding feels like the time is coming to an end for movie rental stores, Larimore doesn’t agree with the notion that the business will completely die.
“Movies are important because they set social and economic boundaries,” Larimore said. “As long as movies are made, people will come to the rental stores to get them.”