End credits roll for video shops
"We couldn't fight it. The magic wand had lost its sparkle." Former Video Ezy managing director Kevin Peterson
The man who brought Video Ezy to New Zealand and watched it become bigger than the box office believes some rental stores will be able to survive for a few years yet.
But after taking the chain from one rental store to 170, technology has beaten what was once a $125 million business.
‘‘We were serious players,’’ former Video Ezy managing director Kevin Peterson said.
‘‘With technology, we could compete, but we couldn’t fight it. The magic wand had lost its sparkle.’’
This week, the last Video Ezy in Nelson closed its doors, leaving just 17 Video Ezy stores in the rest of the country.
Owner Sean Davies said changing habits had played just as much a part in its downfall as illegal downloading and internet streaming services such as Netflix, predicting it could be another couple of years before all the stores were wiped out.
‘‘I don’t think it should ever just disappear completely.’’
The websites of the other major chains, Civic Video and United Video, suggested there might be another 50 or so stores in the country. In 2013, the New Zealand Video Dealers Association made a submission to the commerce select committee which said it represented 268 video, DVD and games rental stores nationwide.
That association has since ‘‘evaporated’’, former executive director Rosemarie Dawson said, and it was unclear how many stores were left.
Statistics New Zealand said there were 279 video and other electronic media rental and hiring stores in New Zealand last year, but noted this included computer and video game rentals.
Dawson suggested Peterson, the founder of Video Ezy here and a former chairman of the industry association, might have an idea.
Peterson, now a franchise consultant, still kept in touch with a few stores but was not sure how many were left.
He brought the franchise over from Australia in 1991, and spent 25 years building it from one store in Auckland’s Papatoetoe to 170 across the country.
Those were the best times of his life, he said, and he believed the industry had changed the country because each new store became a ‘‘community asset’’.
But rental stores plateaued in about 2006, when the industry was slightly bigger than the New Zealand box office, as people started to find other ways of accessing movies with the growth of the internet.
It nipped away at the business model, which tried to adapt by selling confectionary in-store, and even introduced its own online service. But by about 2013, the whole structure had changed.
‘‘My son handed over a USB stick with 40 of the top movies on it,’’ Peterson said. ‘‘That shocked me a little bit.’’ People spending more time on Facebook and Twitter had had just as much of an impact, he said.
Most franchisees did well but those who bought at the peak had suffered, because they found themselves saddled with a declining business nobody wanted to buy.
‘‘It’s like a butcher shop now, nobody wants to buy a butcher shop.’’
Peterson left the business in 2015, when the Australian parent took it over, and said he realised at the time that technology was going to beat the company.
But he thought stores in niche markets, particularly small towns where people might not be able to afford services such as Sky television, could survive.