Your local mom and pop neighborhood VHS and DVD video stores have been closing their doors for quite some time now.

We all know the story, the big box stores (Blockbuster and Hollywood Video) came into small town America offering quantities of new releases.

Why did we go to these places? When a new video was released, we wanted to watch it immediately, without hassle, now. Mom and pop video stores could only get a handful of copies of a new release much to the frustration of us, the customer, causing us to look elsewhere. Pure supply and demand.

For the last few years Redbox has taken this space, Redbox which can deliver new releases for a buck without human intervention while you are walking out of the convenience or grocery store.

But the elephant in the room is video on demand. As of August 2014, Netflix stock for the last 12-month period is up over 67%, with net income growing over 140%. Rivals Amazon, Comcast, Time Warner and Cablevision show slower growth but together hold over 90% of market share compared to Netflix’s 8%. So there’s plenty of room for Netflix to grow, on top of their staggering growth in the last year.

I mean, how many people do you know who don’t have Netflix?

So what’s a local video store to do, other than layoff staff and wait for the inevitable?

Start thinking, that’s what

Our local video store is doing just that — thinking — and one thing they thought about seriously and are now doing is becoming a not-for-profit organization, complete with a board of directors. They want to preserve the rich library they have curated for so many years. So many of these titles are not available online for streaming, some would suggest it would be tragic to allow the store to close down forever.

Non-profit is an interesting idea, and we have yet to see how it will actually work, but merely converting a for-profit to a non-profit isn’t going to keep the doors open. More thinking is required, so here I offer my humble opinions on the matter.

Other than finding a rich source of free flowing capital from donors…

It’s all about service

Service is a concept that continually evolves, and means different things to different people. In the video store universe, service traditionally means an employee can help the customer find movies, offer guidance, offer packages, and create good community. But in the video on demand universe, service means the customer doesn’t have to talk to anybody, can order a movie quickly and watch it immediately without any personal interaction whatsoever. And be very happily serviced. Very different experience.

Therefore, one of the things local video stores have to do is reinvent service.

One idea is to do what the streamers do — bring the product to the customer. In New York City there is a video delivery service where the local video store will deliver VHS and DVDs straight to your door, and come back to pick them up when you are done. These services are offered for yearly subscriptions with free rental incentives.

Going one step further, what if the local video store also offered pizza with that movie, combining forces with a local pizza company? Dinner and a movie never sounded better.

Nurturing the online presence

I think it is fair to say that your local video store on the corner was probably started before the internet bubble in the mid-1990s. Their website, due to a slim budget, was probably last updated in 2004, ten years ago. Or worse, it was updated just yesterday but still has the look and feel of 2004.

How can you have a dialog with your most fervent customers without a persistent online presence? Clicking or tapping on a shortcut or app to Netflix, customers can see what’s up 24/7 and keep in touch. What about your local video store? Still running flyers in .pdf format on their website? Do they even have a website? Only conversing using a Facebook account an employee made one day? Not on Twitter yet? How about any of the other social networks?

But it’s not only about conversing with your customers. How about cataloging the inventory and creating packages online based on search? Netflix does a great job at displaying what they offer, complete with user history, account information, and advice. Your local video store doesn’t need to go there completely, but they should at least allow you to search inventory online, and make it easy to see what your account standing is, and allow for online payments. This is part of reinventing service too —it should be easy as possible to purchase rentals and subscriptions online.

Compete with TV shows too

I am pretty certain that the people who actually rent from local video stores these days do so because of the experience. Surely, these folks love to rent movies that are not available on Netflix, and enjoy walking through the aisles of old releases to seek the jewels of days past, much like perusing the stacks at the library.

But in reality they also subscribe to Netflix.

Why? Because it is cheaper to watch TV shows on Netflix than it is to rent the same show from your local video store. What to do? Create a season package, or come up with a creative way to package TV shows in an annual subscription so the customer feels better about going to you rather than video on demand. Plus, TV shows on DVD and Blu-Ray come with special features, something video on demand does not offer!

Hardware

This is a tough one, hardware.

With all this streaming going on, will people pass on a DVD or Blu-Ray player? I know a few friends who did just that, until their kids wanted to watch something that Netflix didn’t offer. That’s when they went out and got a Blu-Ray player. But it was far from their minds when purchasing that new TV — they figured they would stream everything so why bother?

Apple has been selling Macs without DVDs lately, same scenario in the PC market. This doesn’t bode well for the local video store.

But what if video stores carried movie rentals on USB sticks? There are USB ports on all new TVs and computers these days. What would it take, legally, to be able to rent movies on USB?

Or what if video stores rented players? Now I am losing you…but wait -

Local Streaming

How about streaming movies from your local video store? This is dreaming, I know, or is it? What if there was a company that made a deal with the movie houses to resell the data (movies and TV shows) wholesale to local video stores on a subscription basis? B2B. What if Amazon made deals like this with local video stores, renting subscriptions through AWS?

Local video stores buy data, rent it out, make money, stay in business, keep their customers, and continue to have a retail DVD/Blu-Ray store for those titles that are not available.

Interesting prospect, you think? It would definitely create more jobs. It would make Netflix mad, unless they contributed and made something from it. Maybe this evolves into a local video store with “Amazon streaming”, or something. Now I am getting excited.

There has got to be a way

There is a space for local video stores, but it will involve reinventing service, an online presence, and creativity to continue the tradition.

Any more ideas?