Rogers will shutter its remaining video stores and physical rental services, barely a year after Blockbuster closed all of their Canadian outlets.
Rogers says its video rental and retail business posted a 43 per cent loss in 2011, to a total of $82-million. But for all of these changes to the home video market, independent video store chain Queen Video continues to thrive at their Queen and Spadina flagship location.
Read More: Rogers Closes its Video Stores
Howard Levman, owner of Queen Video, says he was “really sad” to hear about the demise of Rogers Video. Though Levman was surprised to see how suddenly Rogers closed its stores, he says several problems with their rental model failed to keep the business afloat in the new era of home viewing with competitors like Netflix, or On-Demand.
“Rogers was always a suburban place that was very new-release oriented, and this hurt them,” said Levman. “In the end, with services like Rogers on Demand, they were competing against themselves.”
The video market made up for less than one per cent of the company’s annual revenue, so the stores posed no real threat to Rogers’ longevity, they just lost their profitability.
Yet, according to Levman, the profitability of Rogers Video was always at risk due to their critical misunderstanding of their client base. Rogers was not only too focused on new movies, but also on distributing the same number of titles to each store, in spite of regional differences. For instance, Levman says that if a store was in a predominantly Asian neighbourhood, they would only receive one copy of Crouching Tiger, Hidden Dragon. Maybe.
“They would take great movies off the shelves after three months, just because they weren’t new anymore, but these movies would still rent up to three times a month for years,” said Levman. “It’s a shame that the big box chain stores never approached the video business like we did, as being more of a film library than a top-40 release store. It gives us a larger customer base, and our profit margins are higher.”
Currently, Rogers Video has 93 locations nationwide. Starting Wednesday, the stores will begin liquidating their inventory, and offering all remaining movies and video games at two-for-one prices.
On the other hand, Levman’s independent Queen Video empire prospers, boasting “around 70, 000” different titles between their three franchises on Queen Street West, Bloor Street, and College Street. Their video stores are full of vintage movie posters mixed with current promotional materials, personalized staff recommendations (my favourite? “This movie was so scary I puked,” for Martha Marcy May Marlene) and an incomparable group of film-savvy employees.
A quick glance of the “S to T” section of videos shows personalized recommendations for Lena Dunham’s 2010 breakthrough, Tiny Furniture. Image: Joanna AdamsWhen the Rogers Video store closed around Levman’s College Street location, employees never noticed an increase in its steady-flowing business.
Queen Video has made a few changes over its 31 years in the business to accomodate new customer demands to the home video market. Prices are a bit more affordable, and they even accept customers without credit cards. The rise of TV on DVD also helped breathe new life into the indie franchise, something Levman says Rogers grossly underestimated. Unlike Rogers Video, Queen Video rents out each show by the season, for a small fee.
“[At Rogers,] it just wasn’t practical if you wanted to rent something like The Wire,” said Levman. “You would have to rent discs of the show individually. If somebody were to rent disc one, everybody would have to wait for it to come back, or what if disc three was scratched, you’re expecting people to come back and pay five times to watch one season of a show.”
Levman says he would open up more stores if, “he knew he had a longer history.” While Queen Video has a strong command of the downtown home video audience, the longevity of the franchise is not in his hands. The future of the video store is not jeopardized by one-click services like Netflix or Redbox, but instead, by the studios.
For instance, HBO is going to start showing season three of Boardwalk Empire, forcing viewers to buy season two on demand. Season two will show up on DVD partway through the shows’s first-run episodes, limiting its pragmatic reach. Levman says studios, “think the video store is dead.” To further prove this point, Warner Bros. Pictures and Disney have 28-day holdback deals that restrict video stores from buying movies at a supplier’s cost, forcing them to buy them at retail value to start renting them out on the same day.
Image: Joanna Adams“A good independent will always beat a chain,” said Levman. “We carry a product you can’t stream, download, or even find online illegally, and it’s available in better quality than anywhere else. Our selection is huge, the price is good, and our only downfall is convenience.”
So, do not count Queen Video out just yet. Their client base is feverishly loyal. When the Bloor Street franchise opened in the Annex 12 years ago, over 1, 000 people signed up for memberships within the first 72 hours. With recent technological improvements, Levman says this dedicated fandom remains unchanged.
As the home video market changes in Canada, Levman will continue to adapt his business model to compete with the Netflix, Redbox and On-Demand threat. Until then, the video store may go way of the vinyl record shop.
Not that there’s anything wrong with that.
Image: Joanna Adams
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Joanna Adams writes for Toronto Standard. Follow her on Twitter at†@nowstarringTO.
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