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Indie Video Stores Compete via Selection

STEVE INSKEEP, Host:

The business news starts with an effort to survive in the video business. Yesterday we told you about Blockbuster Video, the nation's largest video rental chain, which is struggling. Today we visit an independent video store, which has been succeeding. In Seattle, Scarecrow Video has one of the biggest collections of any of the nation's 23,000 rental specialty stores.

It's a library of sorts, as NPR's Wendy Kaufman reports.

WENDY KAUFMAN, reporting:

The unassuming exterior belies what awaits you as you escape the rain and go inside. There are 80,000 separate titles. For cinema buffs it's sheer nirvana. For the rest of us, well even the store's general manager Kevin Shannon admits, it can be a bit intimidating.

Mr. KEVIN SHANNON (Video Store Manager): You see a customer backing out of the store, going too much, I can't make up my mind you know and what do you do? You know that's just the way it is.

KAUFMAN: It's not just the volume that's overwhelming it's an attitude. This is a place that takes cinema very seriously. The organization is not standard video store. If you're looking for new releases they're in the back and many of the films are arranged, not by title but by Director. Shannon seems to know all of them.

SHANNON: You can just stop right here and say; okay you've got Clarence Brown, early silent film and sound director, pretty much was one of the greatest directors at making his actresses look fabulous. Next to him is Tod Browning, the original Dracula, Freaks, movies that basically got him drummed out of Hollywood. Luis Bunuel--you've got a whole section, almost everything he's ever directed.

KAUFMAN: There are movies from Albania, Eritrea, and Estonia. You can rent equipment to play foreign films that aren't formatted for American screens. Want a murder mystery, go upstairs where a larger-than-life zombie butler guards an entire room of mysteries, film noir, and gangster movies. It is this vast and unique collection that has allowed Scarecrow to successfully compete against the chain stores.

Ms. JAY GLOVER (Customer): We come here a lot. Its stories and all kinds of other people floating in.

KAUFMAN: Customer Jay Glover, whose arms are piled high with movies from India's Bollywood, comes here primarily for foreign films and other things she can't find elsewhere.

Ms. GLOVER: You can find books from all over but when it comes to movies, if you go to a mainstream video store what you get is you know, a hundred movies of the same thing.

KAUFMAN: The store traces its origins to the 1980's and a private collection. But by the late 1990's it was in dire financial straights and in bankruptcy court. That's when Carl Tostevin, a software expert at Microsoft who happened to be a horror film fanatic and a Scarecrow customer, stepped in to buy it, together with a business partner. Since then the size of the collection has doubled, the books are now balanced. Employees get health benefits and there's enough left over to buy more films. But Tostevin, who is now the owner and president, suggests there is something more.

Mr. CARL TOSTEVIN (Owner, Scarecrow Video): What goes on in a place like Scarecrow is such a community, a coming together of people who care about something, it's just different.

KAUFMAN: Today's Scarecrow and other independents represent about 38 percent of the video rental market, that's down from about 50 percent just a few years ago. At the same time, the size of the total market continues to shrink. Independents have to compete with Netflix and other online firms, in addition to the chain stores and they have to contend with the sale of movies at places like Target and Wal-Mart. But Tostevin says the bigger, long-term threat comes from video-on-demand, which allows lots of people to download the same movie at the same time.

TOSTEVIN: And here's where it gets really difficult, at what point does broadband delivery of film become so ubiquitous that they don't bother to put it on media anymore? And that is the sound of Uh-oh.

KAUFMAN: With the future uncertain, Scarecrow is working to control costs but it will continue to seek out and buy the films it wants to add to its vast library.

Wendy Kaufman, NPR News, Seattle. Transcript provided by NPR, Copyright NPR.

Wendy Kaufman
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