Dashboard
A weekly roundup of small-business developments.
As noted in Monday’s Dashboard summary of the week’s small-business news, Miguel Gomez introduced a very unlikely start-up late last year in Ardmore, Pa., a suburb of Philadelphia. Ready? It’s a retail shop called Viva Video! The Last Picture Store. That’s right, it’s a video rental store. In this age of streaming videos and movie downloads, can an energetic entrepreneur breathe life into what most people assume is a dying business?
Why video rentals?
I worked for 13 years at another local video store which closed this past October when their lease ran out. They weren’t interested in dealing with a move, so I set about trying to find a place that could make sense. The store still had a steady business and a very loyal clientele, so as long as I could find somewhere that kept our overhead costs low, I saw a possibility to continue the store.
Did you have much experience?
My wife and I were managers of the store that closed, so aside from seeing the desire in the community to retain a video store, we were lucky enough to know the financials as well and to make our decision based on that information.
How are you going to compete against online services like Amazon, Hulu and Netflix?
Online services do have plenty to offer, but the personal experience is impossible to match. Our store caters primarily to a very film-literate clientele — a group of people that don’t just want access to whatever is thrown their way. A brick-and-mortar location is still the best way to learn and browse smaller titles, whether they be quirky art house fare like “Moonrise Kingdom” or foreign films like “Le Havre” or “The Skin I Live In.”
Don’t online services have user recommendations, too?
Online recommendations end up being a lot safer than those from a real life person, and those online recommendations can end up narrowing your field.
Are you concerned about finding new videos and DVDs and other inventory?
Not in the immediate future. The studios definitely seem like they would like to get out of the physical media game, but to a greater degree than the consumer does. Physical DVD collections are much easier to browse and a good way to show off your tastes to friends. I believe we will continue to see physical media for some time.
Will you be operating an online store?
We will have an online presence but not an online store.
How important is location?
Our location is along the main drag and has plenty of parking, a necessity for a video store. Our town is also a very walkable place with plenty of would-be customers in addition to the ones we hope to bring over from the previous store.
What was your initial investment?
The start-up investment to launch the store came from my personal savings and a loan from my family. A video store is not terribly complicated or expensive in terms of equipment. You need a location, employees, computers, shelving and the movies pretty much. I was able to purchase much from my former employer at a very reasonable price. I’ve always been a movie collector, so I had many movies already.
Did you have a business plan?
Yes. My business plan has us projected as accomplishing profitability after running the store for two years.
What’s your marketing plan?
We are trying to host a variety of events to let the community know we are here and to help foster a love of cinema. We are going to be hosting a screening for the Cinedelphia Film Festival, we will be hosting an outdoor screening for a community event in June, and we hope to have many more such events in the near future. We have plans to add a cafe and ice cream to the shop, as well as a sitting room to read about films and discuss them.
Do you have any competitors?
There aren’t too many video stores left in the country, but the ones that are left are all pretty great. Baltimore has Video Americain, Seattle has Scarecrow Video, Austin has both I Luv Video and Vulcan Video, San Francisco has both Lost Weekend Video and Le Video … so there are communities still supporting video stores, as long as the video stores have stellar inventories.
What has been your biggest surprise so far?
The generosity of customers that want us to be around! One customer has helped me paint the place, put up shelving, everything imaginable. Another customer has loaned us his collection of Blu-ray titles. Barry Solan of Video Americain called us up to cheer us on for starting a new store in this day and age, and then let me purchase rarities from his stock at a greatly reduced price to help us fill in some of the gaps in our inventory. On the first day I opened, before I could even let people walk into the shop, we had people signing up for monthly plans to show their support.
Do you think your store will still be around 10 years from now?
A very well run store with the right inventory, staff and clientele will be able to make a go of it. It’s not an easy business, but anyone in this business right now is in it because they love it.
Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.
Article source: http://boss.blogs.nytimes.com/2013/03/12/the-last-video-rental-start-up/?partner=rss&emc=rss