DVDs, Pizza, Porn: How One Video Store Chain Stays in Business

Last fall, when Blockbuster announced it would close the last of its storefronts, it seemed to officially end the era of the physical video rental model. Family Video, the country’s largest operational video rental chain, is demonstrating otherwise.

At a time when Blockbuster and other video rental chains are gone and discussions about the video marketplace largely center on Netflix and premium cable offerings, little attention is paid to the old-fashioned video rental hub. Yet the Family Video chain is not only still in existence, with nearly 800 locations mainly in the Midwest and Canada, it’s apparently expanding and quite profitable.

The company is very careful about what figures it doles out to the media, but more than two dozen new Family Video locations have opened over the last two years. Company owner Keith Hoogland told a Chicago Sun Times blog that, “The video business, as far as I’m concerned, is cranked up,” and that same-store sales for Family Video have risen in 29 out of the past 30 years.

How has Family Video done it, especially during a time span when the brick-and-mortar video rental business has almost universally gone bust? Customers credit cheap prices and friendly service among the reasons they keep coming back. New releases rent for $2 or $3, and older titles can go for two for $1. For that matter, some movies are loaned out totally for free, and kids can get a free movie rental by showing A’s on their report cards.

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Low costs aren’t the only draw, however, and there are arguably more important reasons why Family Video is still in business. Legacy Pro, a real estate investment company also run by Hoogland, owns the vast majority of Family Video locations. Often, the Family Video site shares space with gas stations and other businesses that give reason for consumers to stop in even if they’re not specifically in the market to rent a movie or video game. Dozens of Family Video stores now operate directly in the vicinity of a Marco’s Pizza, a Toledo-based restaurant chain, and hundreds more Family Video-Marco’s Pizza combos are planned.

In some cases, customers get a free movie rental with, say, a large pizza order. What’s more, the model offers speedy movie pickup and delivery, via pizza delivery drivers. “If you order a pizza, we’ll deliver the movie with your food,” a Family Video regional manager told a Wisconsin newspaper. “If you have movies sitting at home that you need to return, the drivers will bring them back.”

There’s also a small but significant portion of the population that simply prefers the in-person movie browsing and selecting process. “They’re real friendly in here,” one Family Video customer in St. Louis said to the Post-Dispatch, while also mentioning that he usually picks up a pizza during his visit. “I like to browse the aisles. I’m old-fashioned like that.”

“I always thought the experience of being in the store, browsing, getting recommendations from a clerk that knew what they were talking about were very valuable experiences,” Russ Crupnick, video industry analyst for NPD Group, said to the Sun Times’ Grid blog. “Frankly, I don’t think they’re experiences that digital has replicated quite as well.”

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One other factor that makes Family Video stand out is that, despite the company name, an undisclosed number of locations have back-room sections featuring adult (pornographic) rentals. Family Video didn’t respond to a request about how many locations host adult titles, nor any data regarding adult rentals and sales. But during an era when porn has flourished online to an even greater extent than mainstream videos, it’s very interesting that Family Video still finds it worthwhile to maintain the old-fashioned “adults only” back section in stores.

In some cases, the presence of such sections has drawn gripes from locals who don’t think porn belongs in their neighborhoods, especially not in a place named “Family Video.” Over the years, residents in small towns in Pennsylvania and Indiana have filed complaints against their local porn-renting Family Video stores. But apparently, pornographic DVD rentals are still available at many locations, along with the latest action films, Disney classics, and oftentimes, pizza. The goal seems to be giving every member of the family a reason to swing by Family Video.