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Here's How Indie Movie Rental Stores Are Surviving the New Frontier

Indiewire By Sean Axmaker | Indiewire November 18, 2013 at 9:32AM

Like most surviving video store in the age of instant streaming and video-on-demand, Scarecrow is struggling to keep customers coming through the doors. General manager Kevin Shannon reports that rentals have dropped over 50% in the last six years.
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The massive inventory of Scarecrow Video.

Seattle's Scarecrow Video has been called the greatest video store in the country, praised by the likes of Bernardo Bertolucci (who discovered it while shooting "Little Buddha") and Quentin Tarantino (who walked from downtown Seattle to the store's University District location as a kind of pilgrimage to the video Mecca), explored by Bertrand Tavernier in 1997 (he took in the entire laserdisc section and gushed over the selection of Cy Enfield and William Whitney tapes), and voted the Best of Seattle consistently in the annual Seattle Weekly readers polls. (Full disclosure: I was a manager at Scarecrow for three years back in the nineties and I am still a regular customer.)

Scarecrow opened in 1988 with a couple of hundred videotapes, many of them oddball cult titles, from the personal collection of founder George Latsios. Twenty five years later, after a near-bankruptcy and a rescue by a couple of Microsoft engineers (Carl Tostevin is now the store's sole owner), it has an inventory of almost 120,000 titles, including the biggest selection of Blu-rays in the city and an envious collection of out-of-print DVDs (as well VHS tapes and laserdiscs that have never been released to DVD) that would command small fortunes on the collector's market. (Those rentals require a deposit.)

And like most surviving video store in the age of instant streaming and video-on-demand, Scarecrow is struggling to keep customers coming through the doors. General manager Kevin Shannon reports that rentals have dropped over 50% in the last six years.

That is the loss that cinephiles face in the age of streaming movies: a curated library of movies.

It's obviously not the only store facing such problems. Blockbuster has tossed in the towel. Once the King Kong of video rentals with 9,000 locations around the world at its peak, it is closing the last 300 corporate stores and its rent-by-mail business this year. There's no surer sign that the home video rental culture that thrived from the 1980s through the mid-2000s is over.

But does that also mean the end of all those independent stores that once thrived in cities and neighborhoods by offering classics and foreign films and cult movies that couldn't be found on the shelves of corporate chains?

That is the loss that cinephiles face in the age of streaming movies: a curated library of movies, organized and archived and championed by clerks who love their work. It's how Quentin Tarantino and many, many others got a film education. Can you get the same kind of access and immersion online? Just as importantly, can you find the community and the feedback that was an integral part of the video store experience?

Scarecrow is just one of hundreds of independent stores in cities across the country trying to hold on against streaming video, VOD, cable on demand, and the ubiquitous Red Box, not to mention a sluggish economy that makes entertainment dollars tight.

Vulcan Video in Austin, Texas, the home of Drafthouse and SXSW, saw their numbers drop with the Netflix Instant explosion, just like everyone else. And then they found that many customers returned as they faced the limitations of the streaming catalog. "We had customers coming in when Netflix was no longer carrying the Bond films," said Vulcan Video general manager Kristen Ellisor. She credits the culture of Austin, a city that takes its cinema and music seriously, for keeping Vulcan alive even as the last Blockbuster closed earlier this year. Vulcan picks up on the tastes of its patrons, from the smorgasbord of documentaries about food to the charge of Bollywood musicals. But the main reason they are flourishing? "We have smart people showing smart movies to their smart kids."

Other longtime community stores have similar stories. The Video Station in Boulder, for example, moved out of its long-time mall space to a new, smaller neighborhood location this year without downsizing its catalogue of over 40,000 titles, but otherwise remains primarily a rental business with enough customers to keep it alive. It's now the last store standing in Boulder.

Other stores have had to experiment, innovate, and rethink the old model.

Videology in Brooklyn.

Videology in Brooklyn put a bar in front and a big video screen in back, where customers can sit at tables and drink while watching free screenings. It doesn't even look like a rental outlet anymore -- it moved all the discs aside from the new releases off the floor and put in computer kiosks for customers to browse the inventory.

Vidiots in Santa Monica, supported by its community and patrons from the Hollywood film community, raised money to open a screening room and a non-profit foundation that holds workshops, classes, and outreach programs. It's redefining its sense of purpose.

The video rental arm of Facets Multimedia in Chicago, originally created as an offshoot of its movie theater, continues to rent by mail (it beat Netflix to that business by decades, but Facets specializes in foreign and alternative discs that are hard to find in the current video culture), sells discs from its website, and has its own DVD line in addition to the rental location.

Video Free Brooklyn, purchased by film critic Aaron Hillis a year ago, is small (a mere 375 square feet of storefront) and selective rather than huge and exhaustive, a genuine neighborhood joint, and he's turning to an Indiegogo fundraising campaign to upgrade the business. 

Scarecrow has experimented with these and other options. Its inventory is searchable on the website. It sells used and rare discs and tapes on Amazon and eBay. It has a coffee shop -- VHSpresso -- with a license to serve beer and a video screening room with café seating where it hosts free showings of movie rarities (Matt Lynch, who programs the calendar, says response has been slow) and Geeks Who Drink quiz nights (more successful).

It stocks new Blu-ray and DVDs, of course, as well as the usual T-shirts and posters, but it also sells old-school movie fanzines, limited edition vinyl soundtracks, and collectible movie monster figures. And, of course, it looks for trends and community interest (who would have guessed that Korean TV dramas would prove so popular!) -- all of which serves to create a sense of community.

The café at Scarecrow.

But Scarecrow faces issues that most stores don't. With an inventory of around 120,000 titles (and even more individual units) and a system that protects its inventory by keeping it behind the counter, Scarecrow has a big footprint. It requires lots of space (for display and storage) and a bigger staff than most outfits.

Le Video is in a similar position. With well over 90,000 titles, including many rarities and imports, they are the place to go for classics, foreign films, and hard-to-find discs in San Francisco. You'd think it would give them an enormous customer base -- but in fact the opposite can be true when you factor in travel distance, traffic, and the instinct to stay within neighborhood comfort zones. Moving is difficult (if not impossible) at San Francisco real estate rates and cutting inventory is not an option when the store's raison d'etre is to carry everything. With rentals and sales falling and staff scaled down as much as possible, manager Mark Bowen said that Le Video is struggling. "It's pretty amazing we're still going," he confessed.

When Scarecrow posted an open letter to customers on its website in October about the store's situation, local media responded with articles, news stories and profiles. The attention boosted rentals and sales, but no one knows if this is a momentary bump or a sustained commitment.

In the meantime, it's looking into other options, including the possibility of going non-profit. The idea has been talked about internally for some time but earlier this year it was publicized in a profile of the store published in the Seattle Weekly. While the staff doesn't know know what that model looks like, since the word went out, they have had people approaching them with ideas, advice, and proposals.

Shannon said it comes down to either transitioning from within to a stand-alone non-profit or collaborating with an existing organization. And there's no shortage of those, as Scarecrow has been a longtime supporter of the SIFF (the Seattle International Film Festival and its year-round programing), Northwest Film Forum, and Grand Illusion, among others.

So what's the new model for video rental stores? No one knows for certain, but clearly there are stores and customers alike who are doing their best to make sure that there is indeed a future.

This article is related to: Home Video, Indie, DVD and VOD, Video, DVD Labels, News, Blockbuster, Scarecrow, Distribution, Video Free Brooklyn