Is Netflix Killing the Video Store?

It’s mid-afternoon on Tuesday, and Chad Stanard is right where he always is this time of the week – albeit a tad later than usual due to the holiday rush keeping the Traverse City delivery driver especially busy.

“He comes in every Tuesday,” says Cindy Johnson, owner of Neighborhood Video at Hammond and Three Mile roads.

“She knows I’m coming in around noon,” Stanard says. “I’m such a movie buff, and she knows exactly what I like.”

Helping customers like Stanard pick their movies is among the personal touches that keeps people coming back, says Johnson. “There are 101 ways to get a movie now,” she says; finding ways to offer unique customer experiences is crucial.

Dave Abramczyk, who opened Interlochen’s Spotlight Video in 2006, didn’t imagine the technology changes would take place so quickly.

“I did some research, and I thought [movie streaming] was initially going to be 10 to 15 years out,” Abramczyk says. “But technology always seems to accelerate at a rate faster that anyone anticipates. And that’s what happened.”

Indeed, Charter on Demand boasts a library of more than 6,000 movies and shows that can be watched at home instantly. Netflix allows you to watch films online and through DVDs that arrive in your mail. Then there’s Redbox, a kiosk-based movie rental company that partners with retailers like Walgreens, Meijer and Wal-Mart; there are now nearly 25,000 Redbox locations renting out 1 billion DVDs, according to the company’s website – at least eight kiosks are located throughout northern Michigan.

Both Johnson and Abramczyk say they’ve noticed customer behavior changing as Netflix and Charter push their services.

“People these days are more apt to sit at home and push a bottom rather than stop at a store and rent a video,” Abramczyk says. “[Netflix and Charter] are streaming video, and video stores can’t compete. We could offer streaming – I’ve looked into it – but you have to do it on a grand scale, like what Netflix and Charter are doing. It’s not feasible for an independent store to do.”

Johnson says she’s seen some customers stop coming into her store as often, which she attributes to them going with Netflix. But, she says, they usually return eventually, and many of them ultimately choose to rent in-store and via Netflix.

“They have to try it,” she says. “And I understand for people who live in rural areas that Netflix is good.”

Still, there’s plenty the big dogs can’t provide to customers that Johnson believes she can. One major plus: Johnson says some Hollywood studios give new releases to rental stores 28 days before doling them out to Netflix and other companies that offer on-demand movies.

“I think they make more from ‘sell-through’ (video stores) than with streaming,” she says.

Providing top-notch customer service is another way independents stand out.

“People like to come in, see what’s new, physically see me and ask, ‘What’s a good movie?’” Johnson says.

Stores can also offer lots of extras on the spot, says Abramczyk: a giant video selection within reach; candy and popcorn; upbeat, film-loving employees; and, most importantly, a tie to the local community.

Having regular specials like $1 movie nights, donating movies for local elementary school movie nights and charity auctions, personally shuttling rental flicks to homebound customers, flexibility on late fees, and even hosting a family Santa party all are ways these two store owners keep their business going.

“We need the community to realize we need their support to stay around,” Abramczyk says. “We try to serve them the best we can. We have a box when you walk in for customer suggestions, and I’m always looking at that. I’m open to all suggestions.”

“I’m optimistic,” Johnson says of the future of her business. “I’m still surviving. People are really good to me.”