Family Video stores thriving

The first Family Video store in the Toledo area opened 14 years ago to little fanfare.

But while its competitors have been struggling with bankruptcy and closing locations around town, Family Video, the nation's largest privately owned movie rental chain, has been expanding and finding ways to compete in an industry packed with challengers and a variety of new business models.

"The industry is hurting. But that is mainly because our competitors have a different business model from the one we use," said Jason Yuhasz, Family Video's regional director in charge of its northern Ohio stores.

"We own almost all our properties whereas our competitors tend to lease out space. We prefer to buy prominent street corner sites, and we're very selective on our hiring process. … We like to hire people who really like movies and like to talk movies," he said.

Family Video of Glenview, Ill., has 635 stores and is on pace to have 700 stores by September. It plans to open at least 100 stores in its 18-state market by year's end and several of those will be in northwest Ohio.

The company has 10 stores in its Toledo-area market, which includes Lambertville, but is looking to add stores in Swanton, Waterville, and Monroe. In the last several weeks it opened Ohio stores in Sandusky and Ottawa. It plans to add more stores elsewhere in Ohio.

Unlike its bricks-and-mortar competitors, like Blockbuster Video, Family Video has made strides in the face of growth of several alternative video rental formats, such as video on demand offered by companies such as Buckeye CableSystem in Toledo, online video service Netflix, and video rental kiosk firms like Coinstar Inc.'s Redbox.

Mr. Yuhasz said owning its properties helps control costs and set prices easier than some competitors.

The chain charges $1 to rent most general titles, $2.80 for new videos, and offers up to 2,000 children's videos that customers can check out for free.

On new video titles, it usually can get them a month before Netflix.

Two of Family Video's competitors, Movie Gallery and Blockbuster, have found themselves in serious financial trouble. Both took on debt in the early 2000s to stay afloat and have paid the price. Movie Gallery has filed for bankruptcy and is closing locations. Analysts in recent months have thought Blockbuster would file bankruptcy.

Family Video has done better, profiting almost every quarter, spokesman Tim Reynolds said. About 99 percent of Family Videos opening in southern Ohio and northern Kentucky were formerly Movie Gallery stores, said Lisa Anderson, a Family Video regional director.

The company has grown to become the No. 2 video and game-rental company in the United States, behind Blockbuster. But with Netflix and Redbox among its competitors, can Family Video's growth and success continue?

"Forever? No. For the foreseeable future? Yes," said Jan Saxton, vice president and analyst for Adams Research Inc. "It's very hard to say. Some of them will survive and some of them will not."

Blade business writer Jon Chavez and the Columbus Dispatch contributed to this story.