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VOL. 126 | NO. 20 | Monday, January 31, 2011

Thriving Independent

Cooper Young’s Black Lodge Video competes in changing landscape

By Andy Meek

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Matt Martin, co-owner of Midtown’s Black Lodge Video, said his proudly independent movie rental shop is looking to unveil a “midnight movie” series sometime this spring.

Matt Martin, left, locates an Elvis video with Joe Goodwin at Black Lodge.  Martin is co-owner of Black Lodge, which is one of a handful of independent video stores that are surviving the digital/streaming revolution. “The straight up truth is nothing will survive,” said Martin about the changing video rental business. (Photo: Lance Murphey)

Still run by the same two guys who opened its doors in October 2000, Black Lodge also celebrated its 10-year anniversary a few months ago.

That the store is still pursuing the simple plan with which it launched – building a loyal following via a collection of hard-to-find and out-of-the-mainstream film titles – and unafraid of a future that increasingly looks to be dominated by digital trends makes Black Lodge unusual, to say the least.

“The reasons we’ve managed to do well are two-fold,” Martin said. “One, we’ve got one of the only collections that’s been built out of the knowledge of film history. Not based on a new release schedule.

“The second part is we created a business model from day one that we knew had to be as bare bones as it could get.”

That meant taking out no loans, borrowing no money and not requiring as much cash flow as the store’s larger and more traditional competitors – a strategy that’s never stopped bearing fruit.

Martin told a reporter last year for an article published by The Christian Science Monitor that “Blockbuster employees literally laughed in our faces” when the Midtown store first opened.

Yet today, it’s Blockbuster who is working to restructure in bankruptcy court and is closing company-owned stores while also clinging to a business model whose relevance appears to be fading fast.

The franchise group that runs Blockbuster stores in Memphis tried to reassure customers in the wake of Blockbuster’s September bankruptcy filing that the video rental giant’s woes would not affect operations in Memphis.

“As an independent company, we are not tied to the financial performance of Blockbuster Inc.,” reads a letter that greeted customers at Blockbuster’s Lakeland-area store. “We are hopeful that Blockbuster Inc. will successfully navigate their current issues. In the meantime, it is business as usual for this location.”

That is, it was business as usual until about a week ago, when customers at that Lakeland Blockbuster were greeted with a sign that announced “Store Closing - Everything Must Go.”

Traditional rental chains like Blockbuster arguably were sideswiped by the rise of alternatives like Netflix and Redbox, the former an order-by-mail service that includes no late fees, unlike Blockbuster’s Memphis stores, and the latter built around self-serve video rental kiosks.

Redbox also has built its brand around a famed $1-per-day price strategy.

In Memphis, Redbox has rented almost 4 million DVDs since October 2007. The Redbox kiosks, which are scattered around town at the front end or outside entrance of stores like Walgreens and Kroger, each hold about 630 DVDs.

Netflix, which now has topped 20 million subscribers, reported a fourth quarter profit of $47 million a few days ago – a 52 percent jump from the year-ago period.

What those trends mean for brick and mortar stores is still evolving. But it’s becoming clear that stores dependent on new release rentals and that still have debt to work through won’t do as well in the modern era.

Meanwhile, the Black Lodge owners think there still needs to be small alternatives conducive to browsing and whose inventory includes things a person can’t find anywhere else.

“I think there’s still a lot to be said for the process of just going to the video store and not knowing what you want until you’re right in front it and the box art catches your eye,” said Black Lodge co-owner Bryan Hogue.

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