Movie Gallery/Hollywood Video Closing up Remaining Stores

Posted Fri May 7, 2010 at 07:00 AM PDT by Mike Attebery

It's the end of one of the largest video rental chains out there, leaving Blockbuster as top dog. But who will benefit?

Video rental stores have been on the decline in the last few years. The announcement of the 2,400 remaining Movie Gallery, Hollywood Video, and Game Crazy stores being shut down is yet another casualty along the way.

When the stores close in the next few weeks, they'll be leaving behind 750 million dollars in rental business. People that got their videos and games from those stores will have to find somewhere else, and Redbox looks like the most likely beneficiary.

According to analyst Eric Wold, there are an average of 27 Redbox kiosks within five miles of a Movie Gallery or Hollywood Video location. "We continue to believe," said Wold, "that Redbox would be a more likely beneficiary of store closures than Netflix due to Netflix’s inability to satisfy real-time DVD demand for new releases"

He's not talking about the 28 day delay that both Netflix and Redbox have on most new releases, but the "I want it now" factor. If you want a DVD from Netflix, you've got to wait for it to come in the mail. If you want it from Redbox, it's a done deal. Go to the kiosk, pick the movie, and you've got it.

Source: Home Media Magazine

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Tags: Hollywood Video, Movie Gallery, High-Def Retailing, Industry Trends (all tags)