Family Video Celebrates Forty Years of Movie Rentals

At a time when nostalgic escapism dominates the box office, Family Video stands as a cherished reminder of the days prior to streaming, when families skimmed shelves filled with VHS tapes, in search of the perfect cinematic complement to their Friday pizza night. Founded in 1978 by the Hoogland family in Springfield, Illinois, the rental chain originally began as a membership program named the Video Movie Club. After inheriting the Midstates Appliance and Supply Company founded by his father, Clarence, Charles Hoogland began buying movies to sell to retailers, but quickly realized that few people bought them due to their expensive price ($79 per tape was a typical fee). So Charles created the club in order to rent out his enormous collection of videos, and it soon spread to multiple cities. Though studios initially threatened to sue the company, they never did, as the rental system proved to be an ideal way for them to market their latest releases. The Hooglands allowed the business to adopt their corporate name, Family Video, a title that better fit their inclusive, community-focused reputation. 

“People are saying that we’re going to become nostalgic after a while because we are the last man standing,” laughed Keith Hoogland, son of Charles, who became president of Family Video when its headquarters relocated to Glenview, Illinois, in 2003. “Eventually the video business will have to go away, but people were telling me that back in 2000. In 2010, Blockbuster and Movie Gallery and Hollywood Video all closed. Now it’s 2018 and we’re still standing.”

Over the last four decades, the company has expanded throughout the U.S., with over 700 locations in 19 states, and has also found success in Canada. To honor its fortieth anniversary this year, Family Video has planned a series of giveaways and special events for customers and employees alike between Wednesday, September 12th and Sunday, October 21st. The 40-Day Celebration includes an in-store sweepstakes, with prizes ranging from a 4K Home Theater Entertainment System to free movie rentals, as well as an online daily sweepstakes, with the grand prize being a trip to Universal Studios Orlando. Keith told RogerEbert.com that the business was a passion project for his family, and it is one he feels privileged to continue. 

“My dad absolutely loved old movies, and he still does,” said Keith. “He was so excited when the VCR was invented. He thought it was the greatest thing in the world. The only way to see a film at home before then was to wait until it aired on television. I love movies like ‘Rocky,’ ‘Top Gun,’ ‘Caddyshack’ and a lot of others that came out in the late 70s and early 80s back when I was in high school and college. People like relating back to that period when they were in school and taking a date to the movies. It makes you think about the future, or just makes you feel good.”

A secret to Family Video’s success has been their community involvement, a principle that stems from their small town origins in central Illinois. Employees are often local and hired for their understanding of retail. The company regularly supports little league teams and gives out 40 turkeys to needy families every Christmas and Thanksgiving. On October 21st, the culmination of anniversary festivities dubbed “40-Cent Movie Rental Day,” all Family Video locations will host community-focused events such as blood drives, school supply drives and pet adoptions. Spotlight Awards will also be given to employees for their superior service. All of this contributes to the familial atmosphere established by the Hooglands. One of Keith’s favorite traditions each year has been Report Card Day, wherein students who get an A can present their grade in order to rent a free movie. 

“That started because when I was a kid, I got a dollar for every A on my report card,” recalled Keith. “If I got a C, I had to pay five dollars. I remember sitting down and handing my report card to my dad. He’d open it up and say, ‘Okay, you got eight As and one C, so you get three bucks.’ I got very few Cs after that.”

Though streaming services have provided formidable competition, Keith stresses that any alternative form of entertainment has always hurt business, from great weather to high-stakes sports games. He feels Redbox has hurt Family Video more than Netflix or Hulu, despite the kiosk’s conspicuous lack of variety, and estimates that the 15-to-28-year-old crowd tend to visit his store the least, only to return once they have children of their own. The availability of porn online has caused Family Video’s now-quaint “adult’s only” section to no longer spawn the controversy it once had. Yet it was another type of film altogether that gave Keith a wholly unexpected headache. 

“One of the biggest problems we had was with animal activists,” admitted Keith. “They were upset about movies like ‘Old Yeller’ being on the shelf, and we went through a five-year span where they’d be writing letters and calling us. If there was any animal in the movie, they just assumed that the filmmakers were cruel to the animal and it wasn’t treated right. Now, if they heard something about an animal being treated poorly in a particular film, we would be fine to not carry it. But they wanted to smear all animal movies, some of which are among the greatest movies ever made for children.”

Keith cites Dollar Video, the beloved rental chain once located in my hometown of McHenry, Illinois, as key in demonstrating to him the success of the “live floor” layout, making videos readily accessible for customers rather than confining them behind counters. Yet most important of all was the Hooglands’ decision to own the real estate housing their stores, a business method recently portrayed in John Lee Hancock’s “The Founder.”

“Let’s say Blockbuster Video and Family Video are across the street from each other and we both have 7,000 square foot stores,” said Keith. “I’ve got a static rent. It isn’t moving, while every year or so, Blockbuster’s rent is increasing by a few percentage points. Then I realize that I don’t need 7,000 feet. So I rent out 2,000 to another business, perhaps Jimmy John’s or Subway. My rent just went down 15 percent, along with my common area maintenance. Eventually, I might do it again, so my space goes down to around 3,800 square feet. That’s what we call rightsizing. I control my rent by the size of the building, and the money I make from renting out space becomes part of the profit of the business. Whereas Blockbuster couldn’t afford remaining open, our business has only started to decline over the last two years, and that’s when we began rightsizing. Most of our 700 lessees have another business right next to them. It was a smart move because it also helps with the banking. Banks don’t like lending money to video stores because they lose their value quickly, but they love loaning money to real estate. As we kept rolling, we mortgaged buildings to fund our expansion.”

Another ingenious step in extending their survival took place in 2013, when Family Video partnered with Marco’s Pizza to deliver video rentals with pizza orders, an option currently offered at around 140 locations. Though Keith has no plans to enter the streaming business, he may consider adopting the Redbox model of kiosks, which would be placed near building spaces that he’d lease to other stores. In the meantime, he’s found another product that may increase revenue as well as return customers.

“Adding a phone business is a perfect marriage with our video rentals, especially in small towns,” noted Hoogland. “We offer Total Wireless prepaid phones that you pay for every thirty days. About seventy of our stores currently sell them, and they have enhanced our business. People are coming back every month to re-up their phone and buy accessories. That brings a little boost to our revenue as well as more traffic coming into our stores. We’re thinking that is going to help hold up the video business for quite a few more years.”

With DVDs and Blu-rays still proving to be major sales items, Keith remains optimistic about the future. He’s hopeful that the increase of nostalgia in the marketplace may even bring VHS tapes back in vogue one day, a la vinyl records. The business still makes its bread and butter by renting out major box office releases such as “Star Wars: The Force Awakens,” the relaunching of a franchise that began a year prior to Family Video’s birth. According to his own observations about what sells to customers, Keith believes that films dating past 1977 often prove difficult to market. Thus, Family Video began a program entitled “Must-See Movies,” highlighting great films released over the last forty years in order for young viewers to discover them. It’s ideas like these that have made the business even more valuable today, providing a space where consumers can engage with the work around them, as well as each other.