While the slow decline of major rental chains has been good for independent video stores, it’s a temporary boost as the rental audience shrinks, shifting to subscription and online streaming services.
“A lot of Blockbusters in the city have closed, and people came in saying, ‘I used to rent there and now I want to rent here,” says Mark Steiner, a buyer at Scarecrow Video in Seattle. “That audience is shrinking.”
While brick-and-mortar outlets were once the place to rent a movie, they are now only a minority of the business. Brick-and-mortar outlets have only a 24.3 percent market share of the movie-and-video-game rental market (Blockbuster itself accounts for 19 percent of the market), compared to 49.2 percent for kiosk rentals like Redbox and 26.5 percent for subscription services like Netflix, according to a report from market research firm IBISWorld. Those figures do not even take into account online streaming, which would make the market share even smaller for today’s independent video stores.
Even for a large rental store with loyal customers, times are tough. Scarecrow bills itself as the largest independent video store in the country, boasting over 117,000 titles, but a deep catalog isn’t enough to keep profits up.
“The last six years, we’ve experienced a 40 percent drop in revenue. Sales are OK, but rentals are way, way down,” says Steiner. “We’re fighting to survive.”