Last video stores in the Triangle fight to survive

vbridges@newsobserver.comJune 30, 2014 

  • North American Video’s top rentals

    West Raleigh

    “Robocop” (2014)

    “Devils’ Knot”

    “On-Stop” (2014)

    Cameron Village

    “The Grand Budapest Hotel”

    “True Detective” Season 1

    “The Lego Movie”

    Avid Video’s top rentals

    “The Grand Budapest Hotel”

    “True Detective” Season 1

    “Top of the Lake”

— The owners of what might be the last video rental stores in the Triangle haven’t met, but they both waver between saying they should have gotten out years ago and saying they don’t want to let the last video stores die.

“I have respect for the name and the history,” said Chip Williams, 58, who owns two North American Video stores, a 35-year-old chain that at one time had nine stores across the Triangle.

Jason Jordan, 44, who owns the 18-year-old Avid Video on Perry Street in Durham, said he worries about what will happen to the culture associated with the DVDs that he stocks, but he thinks this will be his last summer.

“I just can’t see keeping it up,” said Jordan said.

Williams’ and Jordan’s paths, business models and survival strategies differ, but they share overseeing a fading part of the American pastime of searching the racks for DVDs and Blu-ray discs at a video store, eating microwave popcorn and avoiding late fees.

For the second consecutive year, the home video market continued to grow as spending reached $18.2 billion in 2013. Disc sales and rentals account for 65 percent of that total, with digital sales, video on-demand and subscription streaming capturing the rest, according to a 2014 report by the Entertainment Merchants Association, which represents businesses that sell or rent movies and games in various formats.

However, the retails landscape has shifted significantly as Blockbusters across the nation have closed and as kiosk models such as Redbox have flourished.

From 2008 to 2013, rental kiosks increased from 17,800 to 44,112 compared to independent stores and supermarket rental outlets, which fell from 8,500 to 3,968, according to the report.

Generating income on eBay

When Jordan opened his store in 1996, he chose the name Avid Video so he would be on top of the long list of video stores listed in the Yellow Pages. He started Avid with his former wife, Paige, in a space off Guess Road in North Durham. In 1999, Avid moved to a place on Broad Street, nestled in a shopping center between Whole Foods Market and Ben & Jerry’s and across the street from Duke University’s East Campus, home to the private school’s freshmen.

Jordan’s rent doubled, he said, but so did his revenue. The location catered to the target market that Jordan wanted to reach, one that would be more likely to appreciate the art, indie and other categories just as much as the new releases.

After Jordan didn’t renew his lease option on time, he was forced to move to a smaller space just around the corner on Perry Street in 2009. He didn’t have a car, and he feared the video categories would get mixed up in boxes. So he carried them over load by load in a shopping cart.

Over the years, revenue dropped little by little, he said. After the move, it plummeted more than 60 percent and never came back.

To raise additional revenue, Jordan started selling out-of-print movies on eBay. Then he started selling other movies he had in his inventory. Now, he spends most of his time updating his eBay inventory and responding to and shipping orders.

His eBay sales account for about 75 percent of his income. At this point, he said, he would be better off cutting expenses and his commitment to the store hours.

“I could be making a lot more at home at this point,” he said.

Keeping track of profits

Chip Williams bought his first video store over lunch.

William Burton had bought North Carolina’s oldest video store after original owner Gary Messenger lost control of the company through bankruptcy in the early 1990s. In 1996, Burton asked his friend Williams for advice on three of his six North American Video stores. Williams visited the three stores and told Burton a week later that he should close two but keep one.

Burton responded with “ ‘It is really easy for you to tell me not to close a store that is losing my money,’ ” Williams said.

So Williams bought the store in the Plaza West Shopping Center on Western Boulevard in Raleigh for about $15,000.

“I wrote him a check, came in the next day and took over,” Williams said. The next year, Williams bought the name and the Cameron Village, Garner and Holly Springs locations.

Williams partnered with accountant Bob Reuss and started buying other video stores in the region. At its peak in 2004, the company had up to nine locations, a corporate office and more than 50 employees.

Williams is now the sole owner of North American Video. The company has survived, he said, via a system of monitoring revenues, tempering expenses and cutting loses.

Under Williams’ business model, store managers are responsible for the day-to-day operations.

Every month, Williams plugs his profits and loss statement into an Excel spreadsheet that evaluates and projects the trajectory of that store’s gains and deficits. If the store is trending toward being unprofitable, expenses are cut and solutions are discussed, Williams said. If those measures aren’t successful, he closes the store.

About five years ago, Williams cut his salary in half and took it to zero a year later when he had to cut his employees’ benefits completely and cut their pay by an average of about 30 percent.

Now, Williams said, the business is profitable, but most of the profits go to pay off debt.

A small but crucial piece of North American Video’s model is the “adult product,” which is how Williams refers to the adult movies that line a back room in both stores. Those videos account for about 10 percent of the Cameron Village store’s revenue and 30 to 40 percent of the store’s revenue in west Raleigh.

During an interview, Williams fluctuated between saying he should have sold the business years ago and having hope that with a little more advertising and time, his customers would return with the realization that video stores are the better model to support.

“North American Video is two things,” Williams said. “Movies and employees.”

Most of his eight employees have worked for him for 10 years and are ready to guide customers through the inventory of classic, action and new releases.

He thinks his company offers a better value than Redbox and streaming, and the pendulum will swing back his way when renters miss the variety or old movies they haven’t seen in years.

“I believe in my company and my product,” he said. “I really do think it’s viable.”

Bridges: 919-829-8917; Twitter: @virginiabridges

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