Independent rental operator not spooked by closure of Video Ezy

Civic Video Glenfield owners Nick and Clare Thomas. Photo / Supplied

Australian-owned rental chain Video Ezy is pulling out of the New Zealand market.

Just six stores operate under the retail franchise in New Zealand, down from 17 stores at the end of last year and a total of 135 which it once operated.

Aaron Brett, ex-business manager for the Franchise Entertainment Group which owns Video Ezy said the company was winding up operations in New Zealand but would continue to operate in Australia through a vending-machine model.

Video Ezy Torbay is closing its doors at the end of the month and three stores in Katikati, Carterton and Hamilton will open as independent non-franchised businesses. Video Ezy Whanganui is still considering its future.

Online streaming and illegally downloading movies has seen the number of rental stores drop significantly across New Zealand but Civic Video Glenfield owner Nick Thomas says the eventual death of the industry will be the lack of titles available.

"There's no doubt streaming has taken away a chunk of our business but what I think is going to be the downfall of it is the lack of titles. All the major distributors have gone back to Australia," Thomas said.

"The second-tier titles don't come in [anymore] as it's not cost effective, and from a business point of view, that is going to hit us more than streaming."

Most DVDs and Blu-rays are imported from Australia and are graded according to its own system but have to be rated again under the New Zealand classification system.

It costs between $1200 and $1500 to have a single title rated, Thomas said.

Large-budget Hollywood films are frequently imported but second-tier films, the type which Thomas says gives rental stores their point of difference, are not.

"Blockbusters come in as they can sell them to JB Hifi, The Warehouse, retailers like that, but the smaller titles and smaller distributors are all battling to sell enough units. If they can't sell enough units then it's not worth bringing them in, and that's my biggest worry."

Civic Video Glenfield, which has a library of 60,000 titles, operates independently under the Civic name after the franchise exited New Zealand market in 2015.

Thomas has owned the business for 20 years and by the end of the month will be the last remaining dedicated video store on the North Shore.

"When I bought this business back in 1998 I gave it five years. I said I'd give this industry another five years but we still a core of customers that come in and enjoy the movies," he said. "There's always been major changes in industry. We changed from VHS to DVD and then to Blu-ray, and we've always embraced the technology."

For the last 10 years I've been saying the video industry doesn't need to be franchised. You've just got to learn to adapt.

Back in the "heyday" between 2005 and 2011, Thomas said, he had 22 employees at the store and seven people working on a Saturday night. He is now down to seven employees and three working at any given time.

Sixty per cent of his customers are over 55, and selling Lotto tickets, servicing AT Hop cards and selling confectionery had propped up the business, he said.

Video Ezy exiting the New Zealand market did not worry him, Thomas said.

"Civic Video wrapped up about three years ago and left us on our own. We've had to make a few adjustments, we don't get posters from the movie suppliers anymore so we buy them from Event Cinemas, and we've had to do things differently now that we don't have support," he said.

"For the last 10 years I've been saying the video industry doesn't need to be franchised. You've just got to learn to adapt," Thomas said.

"Not everybody likes Netflix and not everybody is internet savvy."

DVDs and Blu-rays, along with MP3 players, dropped off Statistics New Zealand's Consumer Price Index (CPI) earlier in the year on the back of plummeting sales.

United Video will soon be the only video rental franchise left in New Zealand.