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Evolving Industry

Some video stores close as viewers choose new methods

May 23, 2010
By JOEL DiTATA, The Leader-Herald

The closing credits are rolling on thousands of video rental stores across the nation, and the effect is being felt in Fulton and Montgomery counties.

The former Movie Gallery video store in Gloversville closed three years ago, and recently, its parent company, Movie Gallery Inc., announced it's filing for bankruptcy.

Movie Gallery, which also owns Hollywood Video, announced in February it filed for bankruptcy. Wednesday, a federal bankruptcy judge approved the company's plan to close the company's remaining stores. This includes the Amsterdam location.

Article Photos

The Leader-Herald/Joel DiTata

The former Movie Gallery rental store in Gloversville sits vacant.

"The restructuring will include the immediate liquidation and closure of approximately 760 stores in the U.S ... After these initial store closings, the company will operate 1,906 stores ... including 545 Hollywood Video locations ... The company anticipates closing additional stores during the process," the company said in a statement.

The company reported annual revenue fell $546.3 million in 2009.

Signs posted on the entrance door of the video store in Amsterdam reiterate the bankruptcy.

One sign says "our store will be closing in a couple of weeks," and states the store will not get any new products.

Closure of the Hollywood Video will be the second within the last year in Amsterdam.

The Amsterdam Blockbuster Video was one of thousands of stores to close in September.

In Gloversville, independently owned Captain Video closed in the fall.

The struggles for video stores continue while Netflix - which allows people to rent movies instantly over the Internet or rent movies by mail - and kiosk operator Redbox Automated Retail are gaining business.

Redbox spokesman Christopher Goodrich said there are three reasons the company has been so successful: convenience, prices and the ability to return the video to any Redbox, not just the one where the video was rented from.

"Entertainment is really drawn by users," Goodrich said. "Our kiosks are where customers are already shopping. We're saving consumers an extra stop in their day."

Locally, these kiosks are found outside of grocery stores such as Price Chopper and Hannaford, and videos cost $1 to rent.

Goodrich said there are an estimated three kiosks within a five-minute drive from any other video store. He said there are more than 24,800 nationwide and an additional 2,400 have been installed in the first few months of 2010.

Goodrich said Redbox now has surpassed Blockbuster on the DVD rental market, to 23 percent.

Netflix also has thrived in recent years.

Netflix's revenue increased approximately $99 million over the past year.

"Netflix changed the way people rent movies," Netflix's Director of Communications Steve Swasey said.

Netflix allows the customer to rent a movie for as long as they like from their couch. Customers can sign into their account on the Internet and have certain movies or TV shows playing in a matter of seconds.

Netflix also gives consumers the option to choose DVDs online and have them sent to their doorstep in about one business day for a flat-rate cost per month.

Although the only Blockbuster in Fulton or Montgomery County has left, the company is trying to compete with Netflix and Redbox.

Senior Account Supervisor Jessica J. Anderson said the company plans to install 10,000 kiosks in addition to the 4,000 already installed. They also now offer videos through the mail or for digital download.

Anderson said Blockbuster is the first company to offer movie downloads to a cell phone. Customers with a T-Mobile HTC HD2 smart-phone are able to download movies.

Even with their attempt to adapt to the way consumers enjoy their movies, the company suffered an approximate $149 million decrease in revenue from this time last year.

Of local video stores remaining, Video World is one of last.

Its two locations are in

Johnstown and Gloversville.

Calls to Video World owner Jim Carbone were not returned.

The closest Blockbuster, after the Amsterdam closing, is in Schenectady.

Joel DiTata can be reached at



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