As the owner of the nation's largest video rental store chain, Keith Hoogland said his biggest challenge is the industry's image problem.
"I'm trying to hire 2,000 people this year, and do people want to work at Family Video (when) they think the video business is over?" said Hoogland, whose father, Charlie Hoogland, founded Glenview-based Family Video in 1978.
The privately held company, which became the video rental leader when Blockbuster closed all its stores, has 782 stores in 21 states and Canada, and keeps growing even as many of its peers have closed amid the rise of movie streaming and rental boxes.
"We're a meeting place in the community, especially in the midsize and small towns," Hoogland said. "It's just as chaotic on a Friday or Saturday night as ever."
It is a bright spot in a dramatically declining industry. Revenues for the $3.8 billion video, DVD and game rental market in the U.S. are expected drop an average of 21 percent a year, to $1.2 billion, by 2019, and the number of store operators is forecast to decline 14.5 percent annually, to 1,744 during the same period, according to a May report from market research firm IBISWorld.
Surviving stores will likely focus on niche, hard-to-find films not typically offered by streaming sites and kiosks, the report said.
Family Video is not immune to those pressures. Twenty stores are slated to open this year in the U.S., but the growth rate has slowed from its peak of 100 new stores in 2010, Hoogland said. Business this year is flat, despite record revenues of more than $400 million last year and a slight uptick in same-store sales, he said.
As streaming technology and movie selection improve, Hoogland said, he expects that streaming eventually will supplant video stores. But not just yet.
With a wide movie and game selection and affordable rates ($2.59 to $2.79 for new releases; children's movies are free), Hoogland said customers still appreciate Family Video's personal touch.
As a franchisee of Toledo, Ohio-based Marco's Pizza, Hoogland has opened 75 pizza shops alongside his video stores, with the plan to have 250 pizza joints open in the next two years nationwide. The pizza-movie combination has helped drive traffic and lift sales, he said.
Hoogland said Family Video's community involvement also keeps customers loyal.
Its Round it Up For Lymphoma program, which rounds up customer transactions to the next dollar for the cause, raised $1.3 million in March, half of which goes to the Lymphoma Research Foundation and half to a lymphoma tissue bank at The University of Chicago Medicine. It has raised $3.4 million over the past three years.
"I think a lot of people want you to go and do things that are good for the community," said Hoogland, whose company also owns most of its real estate and a fiber-optic company that provides cable and Internet to about 8,000 customers in Illinois.
Hoogland said he and his father have been warned of the demise of video rentals since 1982, with the launch of the dual-deck VCR that allowed people to copy videotapes, so they take it day by day.
"We always said the video business would be here for five more years," he said.
"Clicktivated": Shoppers eager to buy the dresses, shoes or clutches featured on style advice site Garmental.com's "Summer Statement Dressing" online trend video can click on the moving images and discover what it means to be "clicktivated."
Clicktivated, a Chicago-based company that launched in October, makes interactive online videos that let viewers click on specific items in the video and bookmark them so that they can buy a product or learn more about it.
Clicking on a dress during a retailer's ad might pull up details about the designer or price, and clicking on a roasted chicken during a cooking show might pull up the recipe.
The technology is unique, Clicktivated CEO Chris Roebuck said, because clicking on an item doesn't take viewers away from the video to another site, but rather bookmarks an item of interest in a side rail with a link to purchase or with further details.
It also gives companies a way to directly sell products through their videos, and provides them data about which products in their videos stoke the most interest among their customers, Roebuck said.
Chicago-based Garmental.com, which champions local boutiques and brands, is implementing Clicktivated as it launches more videos with fashion and beauty advice to offer an easy way for viewers to learn about what they're seeing.
"The video platform is where everything is going," said Garmental.com co-founder and style director Suzanne Kopulos. "People want immediacy."
Other Clicktivated clients include Sofia Boutique in the Gold Coast, Vice Media, Tie Society and HSN, said Roebuck, who charges clients a license fee and takes a revenue share of purchases made through the video.
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