"But... Movies? How can that possibly be viable? Isn't physical movie media even closer to obsolescence than comic books?" Yes, it is, and yet it is still viable for a number of reasons.
There is a wax and wane in the world for people collecting versus people decluttering. Even independent of value considerations or what's popular, there are always people who just like to shop for fun things, and other people who want to clear out things they don't want. In this way, carrying movies is riding the tide, not fighting it. We're already doing this with video games, board games, D&D books, and Magic: the Gathering cards. Some stores do it with comics and toys and other game cards and media. We already service collectors and media consumers alike. Provided we could do a few infrastructural things, which I'll reach below, carrying movies was easy and barely amounted to a pivot.
It was immediately apparent on research that most places that buy movies pay absolutely nothing for them, and there was plenty of margin left even if I pay more than they do for buys, and sell at prices as cheap or cheaper than they do for selling. I weighted our buy offers more toward blu-rays and away from DVDs and older media, but we'll still accept anything. I weighted them even further toward 4K movies, but nobody is going to trade those in much yet, even though I am paying (as far as I can tell) almost triple what local competitors are. And I weighted even further in favor of categories that fit DSG's brand: Science fiction, fantasy, Disney, comic book heroes, and horror. (I am calling movies in those five genres "in-genre" at the store and in this article, whereas everything else is "out of genre" or "bulk.") Horror is at the fringe as a tabletop category but has its devoted audience, and it happens to be a good seller in the used movie category because plenty of schlocky horror flicks aren't listed on any streaming services.
Ah, streaming. Well, that's obviously what is killing physical movie media, and yet it still has not finished the job. Netflix, Amazon, Hulu, HBO Go, YouTube Red/Premium, CBS All Access, and so on and so forth. It is all catastrophically splintered, and content licenses transfer and expire on the regular. This means if you want to watch some thing, you absolutely can at any time of the day or night, but if you want to watch a particular thing, there is a non-trivial possibility that the title you want is not available to stream. It either has never been listed, or has been de-listed from wherever it last played, or is only listed on a service you aren't subscribed. Keeping subscriptions active to a bunch of streaming services at once is expensive to the point that it defeats the whole "cutting the cable" savings plan, so almost nobody does that. The result? There is still no always-superior option to owning the movie on a shiny plastic pancake (or as a digital download).
There are other reasons physical media still works, such as for older or much younger viewers or rural viewers who want to watch without an internet-connected device, older versions of movies no longer available today *ahem*ORIGINALSTARWARSTRILOGY*cough*, and on and on. I have said in this space that comic books as we know them have a sunset of perhaps a decade and a half, and I think movie discs are going to beat them into the dustbin by maybe a year or two, if and only if we see a massive licensing solution that couples with ubiquitous access to render every other option inferior in virtually all cases. Even if I pick up the extension option in our current lease, movies will still be a thing until after that lease term ends, which is as much "tomorrow" as I need to care about for now.
So movies make some amount of sense as a physical media thing, and it so happens DSG is a store well-appointed to commerce in physical media things.
Infrastructurally, I needed a few things to happen to make this work.
Rack and fixture were done. Our video game racks are colloquially called "DVD racks." Guess what they were designed to display. I had to make some room on the retail floor, but this was achievable using footage vacated by comics and reclaimed from the holiday configuration. I already had wholesale supplies of thousands of Amaray cases, jewel cases, disc envelopes, liners, wafers, and other sundries involved in the presentation of disc media thanks to carrying video games.
Software had to be ready. I did not want to database up all of the movies in existence, so I got some UPC-compliant barcodes dialed up in an archiving layout, a holdover from some of my first-year-of-law-school learning, and built simple price tiers by media that Square could produce an abundance of labels for. For example, in-genre blu-rays are around five bucks in most cases. Bulk DVDs are 99 cents. Every tier emphasizes low price, with a variable ultra-premium tier available in case I pick up any ultra-rare collectible stuff. With our label over the real barcode, speed and simplicity are achieved.
Equipment had to be in place to reclaim value out of damage. I already own a commercial-grade disc resurfacer, RTI ELM's outstanding Eco Auto Smart. This is no small investment and I recommend it for video game stores even if you never do movies because it's a piece of capital equipment that allows a store to do what the clubhouses/pretenders can't, and that's actual substantial product repair or reclamation. Damage to a video game is a 50% buy price deduction. It's a sound profit engine to be able to literally burn and scour off the damaged layer and reseal it with solvent so that the disc is practically brand new again. And this beast is no wind-crank disc buffer that causes as much damage as it purports to fix; people who have had their discs redone in the Auto Smart have rightly regarded it as something of a hobby miracle. I also have good A/V equipment for testing, including a surprisingly cheap high-end SVHS VCR with a time base corrector for fussy tapes, and I lack only a dual-standard optical drive that supports the obsolete HD-DVD format, for which a collecting niche exists and I've already accumulated some media to validate. I can use an Xbox 360 HD-DVD accessory, but there's a non-trivial software obstacle now due to deprecation of the format. It's not expensive to get Toshiba or LG dual-standard players second-hand if you know the models to buy.
Finally, I needed some merchandise. I have been working liquidation channels, some of which are surprisingly bad "bargains," and I bought up about 1500 units of merch, a bit lighter than I wanted but my intention was to do this inexpensively out of spare operating budget. Out of everything I got, only about 600 units were in-genre and only half of those were blu-ray, but it was enough to hit the shelves and not look anemic, meaning it hit the commitment quotient. The vast majority of bulk DVDs are not part of the cost load I forecast at the outset, so their 99-cent everyday price is basically a freeroll, and they will play well with Buy-One-Get-One-Free sales.
Splitting the stock between in-genre and out-of-genre (treated as bulk) was an important step, I believe. It helps avoid the "junk shop effect" that is already a worry when you carry video games, and seems like it could get worse with movies. Everyone has seen the racks at Goodwill, and nobody wants the hobby game store they run to look like that. And for the odd visitor who actually does want a rom-com or thriller or comedy, they're looking at a price tag that's probably 99 cents and that's extremely attractive. That's less than just about any rental option. They could buy the movie, watch it, and throw it away afterward (or donate it) and not feel any cost impact.
Ultimately I hope to grow the in-genre stock so overwhelmingly to where bulk doesn't even reach the retail floor. I can take it to festivals and vendor events and sell movies out of a bin 2-for-$1 and still be freerolling. There are decent used book and movie stores these days that have gotten their presentation to look better and those are the ones I've been studying to iterate toward. The chain in Arizona called Bookman's is a good example. The cheapest-looking merch there is the books; every other piece of media they offer amounts to a premium.
Stores like Bookman's that sell used books and movies are also doing well in music (vinyl records, cassettes, CDs) and it's not a very far leap from movies to that, especially considering that same disc resurfacer comes in handy again, and much of the software and equipment and rack and fixture continues to be compatible. The big curveball is merchandising display for vinyl records. Like comic books, there really isn't much available to sell records out of, that isn't a purpose-built fixture for records and only records. At this stage in the game, that's more bother than I need. Vinyl is available brand new in distribution, however, and is in a boom cycle. I wouldn't mind bringing it in purely on the basis that it has phenomenal street cred right now, if it weren't for the roadblocks.
I do want to be careful that I'm still in the game business when the day is done. The amount of resources I have poured into the movies category thus far, in total, is less than I have spent on a busy day buying Magic cards. I know where my bread is buttered, and focus is valuable. Most stores are not going to be well-advised to make this move. Stores already positioned strongly in the vintage/nostalgia mainstream market, like Minnesota's Heroic Goods and Games and Florida's Flash Games, Comics, and Toys, were well-situated to carry movies and have seen good results. It's going to depend on what else a given store is doing, what kind of audience it has, and what business structure exists already that can be repurposed or multipurposed into the category.
I have another new category to add in 2019. Like movies, it overlaps into some stuff I am already doing at DSG. Unlike movies, I don't think many, possibly any, other stores in my region are doing it. I've become aware of a few in other parts of the country that have moved or are moving into that space and I have been following them avidly, excited at the possibilities. This is going to have to end as a vagueblog because I don't want to cede first-mover advantage to anyone else, but I hope I can make it happen before we get into the autumn sales cycle and run out of time in the day to experiment and develop the business. My two biggest action items right now are putting more resources into Magic singles and putting more resources into current-gen video game buys, so these other things are great spec work, but I'm paying the bills catering to audiences I know.
Until then, have a great week, and maybe come find a movie you've been meaning to watch, and own it for a few bucks!
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