Adding drama to movie rental

At movie rental stores, the battle for customers is a dramatic epic in itself.

At Blockbuster Video in Jackson, a sign promises a free movie rental if customers will surrender their Movie Gallery membership card. The national Blockbuster chain rolled out its "no late fees" promotion at the start of 2005.

At Hollywood Video in Cape Girardeau, you can rent as many movies a month as you want -- three at a time -- for a flat fee.

At Hastings Books, Music & Videos, you can drop off your movies not only at its store on William Street, but also at two drop boxes in different locations.

These are just a few of the moves by a $9 billion-a-year rental industry in transition that faces stiff competition in a saturated market.

New options for consumers are gobbling up brick-and-mortar rental stores' profits. There's Netflix -- an online video rental business. There are pay-per-view movies that cable and satellite television providers offer that save trips to the video stores and late fees. Some people are simply choosing to buy DVDs and VHS tapes, which are increasingly less expensive.

It's something that has been felt locally.

"I've been in several Hastings, and this is an area where I've seen the most competition," said Robin Hester, the manager of the Cape Girardeau Hastings.

One media research company says that since 2001 the movie-rental industry has decreased by 19 percent. In the early 1990s, there were about 70,000 stores around the country that rented movies. Today, there are about 18,000 -- and each is fighting for a bigger pieces of a smaller pie.

That has prompted companies to try more promotions and sales that will draw customers away from competitors and into their stores.

Jeff Wright is the owner of the Blockbuster Video store that is promising free rentals for a competitor's membership card.

"We're not the first to initiate that," he said. "If someone else starts it, we'll retaliate. ... But everyone goes through marketing ploys to increase their customer base. I don't see anybody doing anything different than we do. It's about market share, bottom line."

Wright owns 42 Blockbusters in Illinois, Indiana, Kentucky and stores in Cape Girardeau and Jackson. Blockbuster, which was founded in 1985, has its corporate headquarters in Dallas.

Movie Gallery, founded in 1985 in Alabama, would not comment on the Jackson Blockbuster's promotion, except to say that it doesn't have such promotions in this area.

Wright said he has known Movie Gallery to do that in other markets where he owns Blockbusters.

But he doesn't worry about other movie services eating into his profits.

"There's a niche for everything," Wright said. "Blockbuster does online rentals. It's like eBay. When that came out, everyone said it would be the end of brick-and-mortar stores, but that never happened."

Getting bigger

One way companies try to adapt is through acquisition. Blockbuster and Movie Gallery have been courting Hollywood Video, which accepted Movie Gallery's offer of $850 million last month. But the dealing isn't over. Blockbuster announced a hostile tender offer of nearly $1 billion this week for Hollywood Video.

Travis Clifton, the assistant manager for Hollywood Video in Cape Girardeau, said his company doesn't rely on "gimmicks."

"We don't really have anything like that," he said. "We pretty much depend on developing a faithful customer base. It gets a little competitive. But ultimately, we really want to make sure they get what they want. If they can get it at Blockbuster, OK, but we'd rather them get it here."

Nevertheless, the Hollywood Video store in Cape Girardeau did expand its offerings in video gaming last year with a new store -- Game Crazy -- connected to its video store. Other leading movie rental stores also offer game rental, another competitive market.

Hester, who works at Hastings, said competition is always a factor.

"It's about customer service," she said. "I don't care how many movies you have, if you don't give them good customer service, they're not going to come back."

Even with all the competition, more movie rental stores keep coming into the market. A.J. Video, for example, recently opened on North Kingshighway in the same strip mall as Wonder Bread.

Bob Holley, who also owns an A.J.'s in Jonesboro, Ill., said he knew there were a lot of video stores in Cape Girardeau when he decided to expand here.

"But we have Movie Galleries and stuff over here at our first store," he said. "That doesn't really concern me. There's a lot of competition, but I'm going to do the same thing I do everywhere I go."

He said if you're nice to people, the word will get around.

But what do all of these marketing promotions mean to those who matter the most -- the customers?

"Not much," said Davis Dunavin, a student at Southeast Missouri State who rents at least one movie a week. "Mainly, I'm just concerned about getting the movie I want. If some deal strikes me at the right time, I'll definitely notice. But I'm not going to play into that."

Deals do mean something to Linda Wilson of Millersville. On Friday, Wilson was shopping at Hastings looking for videos of the popular TV show "24."

"I shop around," she said. "I see ads in the paper and sales in the store. I'll go to three or four different places before I decide what I want."

smoyers@semissourian.com

335-6611, extension 137