The Last of the Video Stores

By Lei Takanashi

When regular customer Lynn Borowitz stepped into Video Free Brooklyn in Carroll Gardens, owner Aaron Hillis’ eyes lit up.

Borowitz described what type of film she was looking for, and Hillis rattled off names of films like a ticker-tape machine. He told Borowitz how he had met one of the directors of a film he recommended at Cannes while working as a film journalist.

Hillis got to work on the shelves. The slapping of plastic cases echoed through the store as Hillis searched for the choicest film for Borowitz. Finally, he came up to Borowitz, DVD in hand, like a waiter presenting a fine bottle of wine–an experience, Hillis said, that no Netflix algorithm could replicate.

“I still have a streaming subscription, so I end up watching a lot of TV that way,” Borowitz added. “But this has turned into how I’m watching my movies, for sure.”

Despite the increased use of streaming services offered by companies such as Netflix, video stores are still alive in New York City. And they aren’t heading to the grave just yet.

A Nielsen study released last August reported that 61 percent of consumers still buy or rent physical home entertainment such as DVDs. In fact, 20 percent of consumers buy or rent physical home entertainment, while 12 percent of consumers buy or rent only digital forms of home entertainment. Forty-one percent of consumers go both digital and physical.

While the video store may look like a dinosaur, it is not yet extinct. Video stores offer a selection that appeals to more refined film consumers, who sometimes can’t find what they want on major streaming services such as Netflix.

To clarify, these stores are still called “video stores,” but most of their inventory consists of DVDs.

Business is not easy. Many video stores have had to find ways to make money outside of videos. And video stores face other factors such as economic downturns and the beast that is gentrification.

Netflix grew to 42 million streaming members within the United States in the second quarter of 2015. It continues to support its DVD-by-mail service, which now has 5.3 million U.S. members, down from a peak of 20 million in 2010. The DVD-by-mail service still makes significant profits for Netflix. It made $77.9 million in the second quarter of 2015. Netflix said in its second-quarter letter to shareholders that DVDs “remain appealing to a core user base and means that the tail end on this business should be quite long.”

Asked about Netflix’s plans for the DVD rental business, a Netflix PR representative, Marlee Tart, referred to Netflix’s long-term view statement of July 15, entitled “Netflix’s View: Internet TV is replacing linear [cable] TV.”  In this statement, Netflix defined itself to be “a global internet TV network” and said that DVD-watching competes with web browsing and cable TV networks for consumers’ time.

But Netflix’s focus on online streaming entertainment comes with consequences.

“You can’t get everything online,” said Wendy Chamberlain, the co-owner of the video store Videology in Williamsburg, Brooklyn. “Netflix’s selection is not very good, and their streaming selection is terrible.”

Chamberlain has been running her business for 12 years. As a horror movie fan, she said, she has seen maybe only three horror titles on streaming that she recognized. The rest were things she’d never heard of. Chamberlain called Netflix “the Wal-Mart of movie services,” offering low prices to the masses but lacking good films.

A simple test—trying to stream classic suspense thrillers on Netflix–proved Chamberlain’s point.

Looking to get into the films of Alfred Hitchcock? Netflix offers only one Hitchcock film for streaming. Want to stream or physically rent Hitchcock’s 1944 Oscar-winning film “Lifeboat”? Too bad. Netflix doesn’t have it.

In its long-term view statement, the company said it is no longer trying to have everything but will “strive to have the best in each category.” Netflix’s position is to actively curate and change its library instead of carrying as many titles as it possibly can.

This is when the video store begins to make sense.

“Having what people want down the road is crucial to almost saying 98 percent of the time ‘Yes, we have that,’” said Howard Salen, the manager of Manhattan’s first video store, Video Room, which opened on the Upper East Side in 1979. For cinephiles seeking a specific or rare movie, video stores may be the best option.

Yet video stores are still small brick-and-mortar businesses, subject to broad economic forces. After the 2008 recession, Chamberlain said, many video stores had declining sales, as people were cutting back on all forms of entertainment.

According to the market research company IBIS, there were 3,810 video rental stores in the United States as of November 2014, down from 4,294 in June 2013, an 11 percent drop in 17 months.

In 2010, after seven years of running Videology, Chamberlain said, she found that she had to either close down the store or think of a way to save it. She had thought that her business was recession-proof, she said, but two years after the start of the recession her business kept going down. She tried to advertise her business more, but it would do little to help a mostly local store. Then she had a spark.

Chamberlain decided to transform the store into a bar and screening room, she said, and it became a success. New Yorkers now come to Videology to watch a season premiere of a show like “The Walking Dead” in a cozy, intimate environment where they can also have a beer or two. Video shelves were removed to make room for tables, and available for rental, however, still line one side of the screening room.

Other store owners said they, too, found they had to supplement video and DVD sales and rentals with other services.

Salen said that Video Room’s video transfer business “was the crucial factor” in why it remained open. Hillis supplements his video-store income with his work as a freelance journalist and said he has “good connections” to the film industry that allow him to stock his store at good prices. Alan Sklar, the owner of the former Alan’s Alley Video in Chelsea, did corporate work and made film montages for ad and news agencies.

Other video stores in the country have become nonprofit organizations, such as Scarecrow Video in Seattle, which, according to an interview in Ars Technica with a Scarecrow employee, made the change because its owners believed that for-profit video stores were no longer a viable business.

But even the greatest video stores may fall to factors out of anyone’s control, such as gentrification.

Alan’s Alley Video survived for 27 years in Chelsea and was an institution.  New Yorkers from all over all came to see the owner, Alan Sklar. Parents brought their kids to the back of the store, where they could watch some classic Looney Toons while the parents browsed. Actors and actresses came in to study up for roles and would peruse Sklar’s immense and, he said, “hypothetically organized” video collection. Interns from “The Daily Show” asked Sklar for Brad Pitt’s worst movies so that Jon Stewart could show clips from them during his interview with Pitt, who was appearing as a guest later that day. People came to get movie recommendations from Sklar, who could rattle off 10 or 15 other movies someone would like just from getting to know them. And almost everyone came to stop by and pet the store cat, DJ.

But then the rents started to go up.  “People felt shut out of their own neighborhood,” Sklar said.

While the closing of his store was partly due to declining sales, Sklar said, Chelsea had been undergoing “hyper-gentrification.” Within the past 15 years, he said, Chelsea has become a major tourist destination because of the High Line and the art galleries surrounding it, giving landlords an opportunity to charge sky-scraping rents. Sklar said his long-time customers were forced out of the neighborhood, replaced by rich transplants who cared less about movies and more about the gelato place next door.

Rising rents forced Sklar of his street-level location, he said. He found space in an office building nearby, but once the elevator in that building broke down, he decided to close the business, not wanting his customers to take a freight elevator to get to his store.

After 27 years in Chelsea, the credits finally rolled.

“I don’t know one person who’s lived in this neighborhood who thinks that this is good,” Sklar said. “Their neighborhood is flooded with people just staring at maps. We’re direction-givers now. ‘Oh yeah, just walk down another block.’ I mean, that’s what we do.”