Home Entertainment Awards Retailer of the Year

HOME MEDIA EXPO: Stores small and large celebrated

By VB staff -- Video Business, 6/24/2008

EMA RETAILER OF THE YEAR AWARD WINNERS

IDEA Single Store Retailer: Video Plus & Tanning

Any good makeover is helped by a good tan. For one Wisconsin retailer, however, the tanning came first. Faced with competition from nearby video chain retailers and general merchandisers such as Wal-Mart and declining sales in both their video rental and tanning business, the owners of Video Plus & Tanning anted up about two years ago by investing more than $20,000 into their 6,000-square-foot store in Rice Lake, Wis., which is about 100 miles northeast of the Twin Cities. Owners David and Jeanne Chamberlain, who bought the business in 1991, spruced up the interior, bought new signage and improved the inventory of adult titles. The Chamberlains also boosted the number of local radio advertisements and replaced some of the store’s management. The investment has paid off. Amid an industry experiencing sales declines of about 15% and store closings by chains such as Blockbuster and Movie Gallery, Video Plus & Tanning increased its 2007 revenue by about 15% from a year earlier, largely by boosting its average transaction amount by about 60%. And the business from the store’s nine tanning beds are also up slightly. —Danny King

IDEA Multi-Store Video Chain: Island Video

There’s local, and then there’s local. Kent Smith doesn’t take the distinction lightly. The owner of Island Video, which has three stores in the Seattle area, succeeds largely by carrying hard-to-find titles that larger chains ignore. “It has been a great adventure to create a business that feels like the crossroads of the community,” says Smith, who got into the industry in 1984 by helping his brother open a video store and bought his first 2,000-square-foot store a decade ago. Smith has taken such a local approach that he has customized each store’s inventory to fit its particular neighborhood. One store specializes in foreign films, another has a wide selection of family films and documentaries, and the third has responded to its district’s demand by boosting its selection of horror and science-fiction titles. Such an eclectic selection, which doesn’t include adult films or videogames, continues to gain fans of the chainlet. “If I’m going to rent a romantic comedy, I don’t get it here,” wrote one Yelp.com reviewer in a February post. “But anything with subtitles or a cult following, and I’m here in a heartbeat.” —D.K.

EMA Chain Entertainment Specialist: Hastings Entertainment

Hastings Entertainment is proof that bricks-and-mortar entertainment retailers can survive. Much of the industry is consolidating, such as the shrinking footprints of Virgin Megastores and F.Y.E. But through the end of April, Hastings has enjoyed five straight quarters of growing profit. The secret to Hastings’ success is quick adaptation to customers’ changing tastes, says the retailer’s long-time CEO John Marmaduke. As CD sales have fallen in recent years, Hastings has slimmed down its music sections to devote more space to rising merchandise categories such as DVD and children’s merchandise. It also has embarked on store design makeovers in the last couple of years, which will culminate with a major Web site relaunch in 2009. “We constantly are improving and experimenting with the concept to improve sales and customer satisfaction/discovery,” says Marmaduke. “It is a difficult and complex concept to execute; we now have a great executive team that can fully realize Hastings’ potential.” —Susanne Ault

EMA Mass Merchant/Grocery: Giant Eagle

Giant Eagle is a grocery chain uniquely committed to home entertainment. Fear of theft has kept many grocers from substantially stocking DVD, but Giant Eagle sees the category as a revenue opportunity. In the past few years in its larger outlets, Giant Eagle has built 1,500- to 2,000-square-foot sell-through sections, which hold 3,000 titles and have a better disc selection than most Wal-Mart stores, according to Chuck Porter, senior director of entertainment at Giant Eagle. That expansion coincides with Giant Eagle exiting the rental business last July, freeing up store space for sell-through. At that time, Redbox’s DVD rental machines were installed throughout Giant Eagle stores nationwide. “We are looking at this DVD area as a way to experience a lot of growth and get new business into stores,” Porter says. “We also can offer advantages over Best Buy and Wal-Mart—with fuel perks. For every $50 you spend at Giant Eagle, you’ll receive 10¢ off per gallon of gas at GetGo,” which is owned by Giant Eagle. Porter adds that he’s pleased with handing DVD rental responsibilities to Redbox. The relatively small machines are able to go into Giant Eagle’s tinier outlets, which weren't able to offer much DVD before. —S.A.

EMA Online Retailer: Netflix

Speaking at an investors’ conference in San Francisco last month, Netflix CEO Reed Hastings made it clear that the company has no problem with eventually shedding its designation as the largest U.S. movie rental service via mail. “We named our company ‘Netflix’ and not ‘DVD by Mail’ for a reason,” Hastings says. The company took its first steps toward instant movie distribution in January 2007 by launching its “Watch Now” service, which provides video streaming of full-length movies to customers’ personal computers in 30 seconds or less. Since then, Netflix, which doesn’t disclose how many movies are streamed a month or how much revenue is derived from the service, boosted its streaming inventory fivefold to more than 10,000 titles, or about 11% of its total DVD selection. The service helped the company grow its first-quarter subscriber base 21% from a year earlier to 8.24 million. It also set the stage for Netflix Player by Roku, the $99.99 set-top box that allows video streaming directly to customers’ TV sets. Since the May 20 release of that product, Hastings’ words have become all the more prescient—the box was sold out three weeks after its debut. —D.K.