Life After Blockbuster: Catching Up With the Owner of Some of the Last Remaining Blockbuster Video Stores


If your local Blockbuster closed its doors before you could return that overdue DVD you just found under your couch, you’re in luck — you can still drop it off. The only catch is that you might have to drive to Alaska to do it. Although Blockbuster shuttered its remaining corporate-owned brick-and-mortar outlets in January 2014, its bare-bones website lists roughly 50 stores that remain open in such locations as Bend, Oregon; Grand Forks, North Dakota; and even a town called the North Pole, Alaska, on 320 North Santa Claus Lane, to be exact. (Hat tip to reddit for finding the list.) “If you were to go into any of our stores in Alaska on a Friday or Saturday night, you’d be surprised how many people are in there,” says Alan Payne, the owner of more than 20 of the remaining stores.

Payne’s and the rest of the surviving Blockbusters are essentially BINOs — Blockbusters in Name Only. With the corporate superstructure dissolved, they operate independently, navigating their own way through an increasingly shrinking market. They’re also now technically classified as licensees rather than franchisees, since the owners pay a monthly fee for the right to use the Blockbuster name. And the Blockbuster name is really all that exists of the once-mighty video rental store chain, which a mere decade ago, boasted a market value of $5 billion, with 9,000 stores staffed by 60,000 know-it-all teen film buffs and/or wanna-be filmmakers.

the Blockbuster store in North Pole, Alaska
the Blockbuster store in North Pole, Alaska

The Blockbuster Video store in North Pole, Alaska.

But when the corporation stumbled, it stumbled hard. The seeds for its demise were arguably planted in 2002 when Blockbuster had the opportunity to purchase a fledgling rental-by-mail service called Netflix (created, as the story goes, by disgruntled renter Reed Hastings, who was unhappy about owing $40 in late fees for a copy of Apollo 13) for a mere $50 million — and passed. Netflix subsequently found its footing and its almost-owner played catch-up from then on, unsuccessfully launching its own subscription service in 2004. By 2010, a drastically slimmed-down Blockbuster filed for bankruptcy, and was purchased the following year by the satellite-TV company Dish Network, for much, much less than $5 billion: try $320 million.

Dish kept the Blockbuster name for its on demand service, Blockbuster@Home, and spent the next two years closing down physical stores. Nov. 9, 2013 was the last day customers could use their Blockbuster cards to rent a DVD — appropriately enough, This is the End holds the honor of being the last movie the company ever rented. January 12, 2014 became the final day of operations for corporate-owned locations, leaving behind only those independently-operated BINOs.


The Blockbuster Video in Grand Forks, North Dakota

The highest concentration of BINOs can be found in Alaska and Texas, where Payne operates a small, but modestly profitable rental empire. Payne’s Austin-based company, Border Entertainment, currently oversees 23 Blockbusters, down from 26 last year, and 41 at the height of his success in 2009. Whether the stores are in Anchorage or El Paso, he says, little has changed since the mid-’90s: The familiar Blockbuster logo and color scheme are still in place and, more importantly, there’s a lot of foot traffic through the aisles, particularly on weekends. “I hear a lot of people saying, ‘Your stores are so busy, why are you closing them?’” Payne says.

Behind the scenes, though, this definitely isn’t the ’90s anymore. For starters, Payne rarely deals with anyone from his ex-parent company. “As far as I know there is no Blockbuster Inc. anymore, other than somebody taking our [licensing] checks every month,” he laughs. That means he’s the one who sets the standard prices on rentals — generally about $3.99-$4.99 for new releases, while older movies rent for 49 cents a day, or 99 cents for five days. And he decides how many copies of specific titles to stock, purchasing them either directly from wholesalers or, occasionally, from Walmart or Best Buy.

He also grants the individual stores a certain degree of autonomy, furnishing them with local budgets to respond to the tastes of their respective communities. For example, horror movies are extremely popular in Texas, which perhaps isn’t surprising, since it’s a state known for its multiple cinematic chainsaw massacres. Meanwhile, up in Alaska, where high broadband rates can make streaming services a pricey proposition, renters snap up full seasons of TV shows. Payne says that HBO series like True Blood and Game of Thrones always fly off the shelves, as does FX’s Sons of Anarchy, NBC’s Grimm and AMC’s The Walking Dead and Breaking Bad. “[In Alaska] you can’t afford to binge-watch on Netflix,” he explains, “so you’ll binge-watch by renting a season of something on DVD for a few dollars.”


One of the stores in El Paso, Texas

As in Blockbuster’s heyday, new releases tend to be the most in-demand titles, accounting for more than half of the revenues from Payne’s stores. But he’s also noticed that the market for older movies has been holding steady, whereas the new-on-DVD business is trending downwards, as iTunes, Amazon Instant, and Netflix give viewers more ways to catch up with recent movies they missed in theaters. (Payne’s stores also continue to rent video games, but he says that market has experienced an even steeper drop-off than the DVD business, which will sadden anyone who used to depend on Blockbuster for their SNES and/or Sega Genesis needs.) “Older movies are harder to find. You can stream them on Vudu and places like that, but you’re going to pay $3 or $4 to rent it. That’s much more expensive than coming to our store and renting it for a dollar or less.”

A strong inventory, attractive pricing, and cost-saving measures have helped Payne hang onto his stores even as Blockbuster itself faded away. (As for the rest of the stores on the online list, the status seems uneven: We called all 50 and found at least 10 had non-working phone numbers, including 4 Payne has closed.) Still, Payne is not under any illusion about the future of his industry. Even he admits to rarely watching movies on DVD anymore, either catching them in theaters or loading up his iPad for those long round-trip flights from Texas to Alaska. “This is not a long-term business,” he says matter-of-factly. “There won’t be 23 stores two years from now. There’s a sea change going on, and we’ve managed to survive it better than other, but I don’t see it bottoming out anywhere. When people start losing that connection with the physical product, the idea of going to the video store to rent that physical product weakens as well.”

Photo credit: © Consumerist Dot Com, Google Images