A Republic of Indie in a Netflix Nation
How Austin's homegrown video stores are faring against the big red giant
By Marc Savlov, Fri., Jan. 16, 2009
You know things are heading south by south weird when Salemi, Sicily, buys out your favorite independent video-rental store. Which is exactly what happened last week to the entire rental stock – some 55,000 titles in all – of Manhattan's legendary rental store Kim's Video on St. Mark's Place. (On the plus side, the New York Daily News reports that Salemi will now host "the Neverending Festival, a non-stop public projection of Kim's Video collection." That's cool; just let us know what time Beneath the Valley of the Ultra-Vixens starts, and we'll book our flight accordingly.)
The closing of Kim's rental department is major news in the tape-head and retail video-rental worlds (which also include, obviously, DVD rentals), but it's just the latest bad news in a increasingly long list of video stores coming to the end of their running time. And it's not just happening in New York, either. One of the largest independent video stores in the world, Seattle's Scarecrow Video, is, according to the Alamo Drafthouse's Terror Tuesday programmer and VHS evangelist Zack Carlson (see "Never Forget"), also suffering. Video stores in Austin are feeling the pinch, too, although, surprisingly, Austin's four main independent video/DVD rental outlets – Vulcan Video, I Luv Video, Hyde Park's venerable Movie Store, and Encore – are doing considerably better than the national average.
And the national chains are faring even worse. Blockbuster, the longtime Antichrist tormentor to indie Nazarenes such as Kim's Video, has been in market-share free fall since 2002, with its stock price dropping harder than The Wrestler's patented Ram Jam, from a millennial high of $30 to the pitiful current, hovering around $1.32 per share.
Part of this nationwide trend can be attributed to the unstoppable rise of Netflix, the Los Gatos, Calif.-based DVD subscription service founded by Reed Hastings and Marc Randolph. Launched in 1997, Netflix allows subscribers to rent from its voluminous library of more than 100,000 titles (including the relative handful of films available in the barely popular Blu-ray format) for a flat monthly fee. (Netflix also offers a smaller number of films for streaming.) Ordered online ("queued up," as the parlance goes), the movies show up in your mailbox a couple of days later and can be watched and returned immediately or used as beer coasters for as long as the customer wishes: no late fees, no waiting in line at the video store, no hassles, and more of a selection than any brick-and-mortar video store in the country. No fools they, Netflix also gives subscribers a prepaid envelope to return DVDs. (Its incoming, disc-sized envelopes are an eye-catching scarlet which has been referred to by some catty rental clerks as representing "the blood of the independent video-store owners.")
There are other subscription services, of course, including Blockbuster's own (Total Access), Amazon's and Apple's streaming download stores, plus a variety of online movie download sites, but for the purposes of this article, we're going to use Netflix as an all-purpose bogeyman representing the trend toward online and downloadable movie rentals, as opposed to its neighborhood flesh 'n' blood counterparts. (Which, on the face of it, might not sound fair to Netflix, but then again they haven't returned our e-mails requesting an interview, and we're pretty sure they can take the heat.)
So Kim's is closed; VHS, aka JVC's Video Home System, is officially a dead format (fittingly, David Cronenberg's A History of Violence was the last major studio film to be distributed on VHS); and easy online video subscription services are making things tough all over for your neighborhood mom 'n' pop rental store. Media of all kinds – newspapers, videos and DVDs, music (the slow, bloody death of the Recording Industry Association of American has by now been grinding on, or so it feels, longer than the Hundred Years' War) – are in an escalating state of flux. No one really knows for sure what your TV room is going to look like two years, much less 10 years, down the road, so rapidly are the delivery systems being shuffled. Even Blu-ray's future is suddenly in doubt, thanks to sluggish sales and a dearth of available titles. HD DVD? Super VHS? They were obsolete before you even found a space in the Best Buy parking lot.
One unexpected (and worrying, for independent video-store owners) piece of news arrived last week, courtesy of the mammoth South Korean television manufacturer LG Electronics – whose motto is "Life's Good" – who had a record $44 billion in sales in 2007, according to their online press release. LG has announced a partnership with Netflix and will be releasing a LCD HDTV that will receive more than 12,000 Netflix-distributed movies directly to the TV set with no clunky converter box or other peripherals. The times, to quote Dylan, are a-changin', and they're a-changin' faster than it takes to be kind and rewind. Even in Austin.
"We started out in 1984 as a video store in Garland, Texas. We stayed there for three years until a company called Blockbuster Video opened their third store approximately 250 feet from our front door."
That's Chuck Lokey, the longtime owner of Encore, one of a handful of original Austin movie-rental stores still extant. (Prior notable casualties include, among many, many unsung others, Videoasis, Video Barn, and dearly missed South Austin hangout Pedazo Chunk, the latter of which was owned by Danni Knowles, sister of Ain't It Cool News godhead Harry.)
"At that time, Blockbuster was owned by the Cook family, and they eventually got forced out of their own company. Anyway, we stayed there for two years after they'd opened, and I went to my landlord to try to get a better deal, but he told me, 'No, somebody's offered me double your current rent.' Guess who? Blockbuster. They've been my nemesis forever. So we moved to Austin, and that's when we added music to what was previously just a video-rental store. We've been here since November of 1995."
Among the big four Austin indie video stores, Encore is the one people south tend to forget about (although it recently picked up an Austin Chronicle "Best of Austin" award for Best Metallurgy thanks to its newfound focus on all things metal). That's a shame, because for a long time, from the mid-Nineties to the end of the last century, Encore was the place to rent laser discs, that now-defunct digital-video format that existed from 1978 until 2000 (the final laser disc released in the U.S.? Tim Burton's Sleepy Hollow). Like most supercool technological gadgetry, the laser disc found its most receptive audience in Asia and, in particular, Japan, where it outsold and outlasted its American counterparts by orders of magnitude, limping along until 2001 when the format died a particularly graceful death with the release of the Hong Kong-produced, Tony Leung chopstick action comedy Tokyo Raiders. R.I.P. laser disc, we hardly knew ye.
And as for Encore today, in the age of Netflix? Diversification has been the name of its adapt-or-die game plan, and it's working: If you need a Deicide hoodie for your black metal offspring or a CD compilation of the best of Italian prog rock Argento scorers Goblin, this is the place to go.
"Video [rental] is not doing as well as I'd like," says Lokey, "and it's certainly not the strength of our store anymore. It used to carry the ball, but now it's music. We're selling more music and T-shirts. I've learned, too, with specific regard to Netflix, that we've made serious inroads in renting and selling television series. I've got more TV series now than I ever thought possible, and that's because Netflix doesn't carry that many TV series. Our small selection here does quite well."
One of the defining aspects of Austin's video/DVD rental scene is its unwavering loyalty: There are Vulcan people, I Luv Video minions, Movie Store browsers, and, natch, Encore metallurgists.
"Sure," says Lokey, "we have our regulars. We develop new ones all the time, and most folks, when they find us, we've got 'em. It's kind of an odd store, really, because in the last three years, we've morphed from being a video store that also sold music on the side into being much more of a CD-and-music-driven store with video rentals on the side. Certainly, as far as selling music, we're one of the best in town, and in terms of selling metal music, we are the best. No one else even comes close. I've got guys coming from Houston, San Antonio, to buy the new black metal CDs. Which is part of the new niche marketing game. You've got to play it, and we've gotten very, very good at it. It's like our mottos says: 'Encore: Things are different here.'"
It's not just Encore that's different, though. It's Austin and its homegrown film-geek culture that has allowed places such as the Alamo Drafthouse, websites such as Harry Knowles' Ain't It Cool News, and the two biggest indie video-rental stores in town – I Luv Video and Vulcan – to not only survive but indeed thrive while nearly everywhere else in the country the market is grinding to a standstill.
Video-rental outlets outside of Austin – and indeed all the major rental chains – appear seemingly paralyzed by an unknown future that not only includes the specter of Netflix (and its impersonal, vaguely onanistic methodology that makes the subscriber feel specifically catered to when, in fact, they're having zero interaction with anything resembling the sage old video store clerks of yore) but also the prospect of yet more online-download or streaming platforms to come. Technological advances in media delivery – to televisions, to cell phones, to iPods, to Xboxes and Wiis and PS3s – are happening at a rate that's outpacing the corporate conglomerates' ability to think straight or to plan for the future. The future, in a very real sense, is happening right now, and the metaphorical five-year plan of Blockbuster (and its ilk) has been frantically pared down to a five-month plan, a five-week plan, and, ultimately, the shuttering of many obnoxiously blue-and-yellow boxlike stores: 290 Blockbuster stores closed in 2006, nearly 300 in 2007, and dark, if unconfirmable, rumors of a Blockbuster-free world are hovering on the horizon.
Which is good news to Conrad Bejarano, co-founder of Austin's I Luv Video, the largest and most popular of Austin's independent video stores.
"Can you make sure to mention that this year is our 25th anniversary?" he asks over drinks at Spider House (which Bejarano also owns with I Luv co-founder John Dorgan, along with the neighboring EcoClean and the soon-to-be-reopened United States Art Authority).
Done.
"I was working at a video store called Sounds Easy in Phoenix in 1984," says Bejarano by way of explaining I Luv's origins, "when I came to Austin to visit my friend John, and I thought, you know, this would be the perfect town to open a store for this new trend called 'video stores.' Not long after that visit, I moved here, and John, who was a huge fan of the Clash, and I opened up London Video in Dobie Mall, which did really well, but because there was no parking and no visibility from the street, we sold it within a year.
"We immediately opened up our first I Luv Video way down on Slaughter and Manchaca, and eventually we had nine different locations all over town. Back then we were pretty mainstream as far as what we offered. We kept the culty stuff up at our Airport location. But we've learned that our store's culture isn't conducive to having stores too far south or too far north, and so we ended up consolidating into the two current stores."
I Luv Video has always been a mainstay and supporter of obscure, psychotronic fare – personally, we recall getting hipped to the short films of NYC cinema transgressors Nick Zedd and Richard Kern via I Luv way back in the late Eighties – even going so far as to add a seemed-like-a-good-idea-at-the-time pizzeria to the mix, with an I Luv Video Pizza at the original south location. (The concept – videos, pizza, and beer delivered to your house – was a natural fit for South Austin and lasted a surprising six years.)
Eventually, though, Bejarano and Dorgan realized it was their two cult cinema-centric stores – at 2915 Guadalupe and 4803 Airport – that were bringing in the most customers and developing the most repeat clientele. Sensing that any attempt to compete with then-industry titan Blockbuster for market share of mainstream video rentals was doomed for disaster ("You've got to remember that the price of VHS tapes, in the Eighties, was running anywhere from 60 to 80 bucks a tape," reminds Bejarano), the chain pared itself down to the two current locations and began to grow exponentially.
"What we decided to do was sort of groom our clientele and just get two or three copies of a mainstream VHS release – as opposed to the 50 to 100 copies a single Blockbuster would buy – and spend the rest of the money on films we wanted to watch, which were weird, underground, and generally not carried by Blockbuster – or anyone else, for that matter. And that's stayed our guiding philosophy from there on out. What's happened is that we've created a culture from scratch by adding cool movies that you can't find anywhere else, cool staff members who aren't snobs but will actively help customers find what they don't even know they're looking for, and just anticipating what our customers want."
Unlike the rest of the world, I Luv Video is doing bang-up business. "Every year it gets better and better," says Bejarano. "These last two, three years, the sales and rentals have just been amazing, because now, from a rental perspective, you buy a DVD for $16, rent it out for $4, and get it right back. It's just an amazing business."
Of course, having been in business for 25 years, I Luv Video has amassed the largest back catalog of VHS and DVD titles in town. With some 80,000 titles on hand at its Airport location alone, it's now one of the largest and most respected video/DVD rental stores in the world.
"If we were to try to open up all over again now, it just wouldn't be possible. We couldn't even find half the titles we have in stock because so many of them, especially the VHS copies, are just gone. And as far as Netflix having an impact on us? I don't see it. We have customers who have Netflix and still come into the store and browse and rent from us. Right now, we're doing better than we ever have, although 14 years ago we thought that the advent of DVDs would be the end of the video business. That's why we opened up Spider House Cafe, right next door to our Guadalupe location. John and I figured, 'Geez, in a few years our video business is going to die, so let's find an alternative.' As it turned out, the exact opposite happened: I Luv Video on Guadalupe fed into Spider House and vice versa. In a way, they're symbiotic, which is also what's going on with EcoClean and the USAA – it's all part of the same I Luv Video culture, with the same people and the same clientele interacting to one extent or another in all four places. It's a totally Austin kind of thing, I think. I'm not sure that this could have taken root and grown the way it did anywhere else."
Down at Vulcan South, on the newly hyperrevitalized hipster hub that is (cringe) "SoCo," general manager and Vulcan spokesman Joe Shivers is equally sanguine about Netflix and the alleged Death of the American Video Store, if a bit more animated.
"The one thing that Netflix has done that I don't like is that it's made a place like Vulcan less special. And by that I mean, it used to be you could come to a town like Austin, find Vulcan, and discover a whole new world of movies that you didn't even know existed. And now so much of that is available to discover online, via Netflix and similar sites. We have things they don't, for sure, but they really do have a pretty good selection. I remember when I was a kid, I had to search all over Birmingham, Alabama, all the Blockbusters and so forth, to find a single copy of, like, Evil Dead. And when I finally did find it, it ... was ... awesome. That sense of going on a quest to find something that difficult to find – that's almost, like, mythic – is no longer around, because now you can find whatever you want, whenever you want, on the Internet. You know, we've definitely lost some customers to Netflix, but I see a lot of customers who do both, actually. It's not that big a deal for us. The worst thing Netflix has done is get people thinking that there shouldn't be late fees. Video stores cannot exist without late fees. You just can't do it. There's no way to survive without them. But on the whole, we're doing fine. Better, actually, in terms of hard numbers of films rented, profits earned, than ever before."
In a roundabout way, Shivers has hit on the very root of what has allowed Austin's independent video stores to – in most cases – flourish while the rest of the country sees its neighborhood mom 'n' pop rental stores wither and die in the advent of Netflix et al.
Vulcan, I Luv Video, Encore, and even the smaller but still doing fine, thanks for asking, Movie Store in Hyde Park are – unlike Blockbuster or Netflix or any online movie retailer/renter – tightly bound up in the community of Austin. They're not just places to go rent a movie to watch on the weekend; they're places to go hang out, to browse the stacks and aisles for hours, if you want, to ask the living, breathing, and incredibly well-versed in the nuances of outré cinema staffers what they recommend. Chances are, they'll know what you want before you do, and they'll hip you to things that are so kickass cool your head will explode. And they'll be right there to help you pick up the pieces and steer you toward something even cooler – albeit perhaps less Cronenbergian in its mind-blowing awesomeness; a person can only take so much metaphorical head trauma, after all – the next time you come in. Austin appears to be increasingly unique in this way, and the cineastes, sprocket heads, film geeks, and just plain customers of Vulcan, I Luv Video, Encore, and the Movie Store (along with the lingering echoes of Pedazo Chunk and Waterloo Video) seem to know it, appreciate it, and most remarkable of all, rarely take it for granted.
It's a strange, often downright surreal age of constant content flux that we're living in, on all fronts, technological and otherwise. Marshall McLuhan's prescient note that "the medium is the message" has doubled back and gone meta on itself: The medium is the message, and the message is now the medium. Online or off? Netflix or Vulcan? Miraculously, VHS isn't really dead, and neither is the independent video store. And at least we won't have to book passage to Sicily the next time we want to bring home feral cinematic strays such as Buñuel's Un Chien Andalou or Sam Fuller's White Dog.
