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One-third of America’s video rental stores have a really bizarre survival strategy
09.15.2010
01:21 pm
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Dangerous Minds pal Steven Daly sent this Hollywood Reporter article my way this morning about a novel new way the beleaguered video rental store industry is fighting the severe downtown in their fortunes. With Hollywood Video and Blockbuster getting crowed out of the marketplace by bit torrent, VOD, Netflix and Red Box, how will the “mom-n-pop” indies survive? Well, that’s an interesting question and no, it’s not April Fools Day, either:

“Please enjoy the movie. Would you like a tan with that?”

At the rate big video-rental chains are closing up their shops, the 10,000 or so independently owned stores are getting creative to ensure they don’t suffer a similar fate. Combining movie rentals with tanning beds is one popular move.

More than 3,500 independently owned video-rental stores have added a tanning salon to their stores, estimated Ted Engen, president of the Video Buyers Group, an industry trade association.

A good tanning bed—one that consumers won’t mind paying about 50 cents a minute to use—can cost up to $15,000. Despite the hefty upfront cost and fattened energy bills, rental time combined with ancillary product sales like suntan lotion translate into a profitable business.

Engen said peak hours, days and seasons for tanning coincide nicely with the slow times in the movie-rental business, so traffic is drawn to the combo stores fairly consistently. A store with a half-dozen beds typically will garner 40% of its revenue from tanning and 60% from DVDs.

Video Rental Stores’ Bizarre Survival Strategy (THR)

Posted by Richard Metzger
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09.15.2010
01:21 pm
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