The Big Are Getting Bigger Among Video Store Chains

Continuing an ongoing trend, the big video store chains are getting bigger.

Santa Ana-based Video Store Magazine reports that the top six video store chains now control 33% of all industry revenue and more than 75% of the revenue generated by the top 100 video store chains. Those percentages are driven by the fact that there are only a few big chains while there are hundreds of small chains with only a few locations.

The magazine offers proof that the video industry is still in a consolidation phase. Fort Lauderdale-based Blockbuster Video, Dothan, Ala.-based Movie Gallery and Philadelphia-based West Coast Entertainment each acquired three or more competitors during the past year.

In a bow to changing market realities, the magazine’s top 100 listing for the first time includes revenue generated by the sale of videos. The magazine’s editors point out that nearly half of consumer video spending now is driven by the outright purchase of videos.

Last year, Minnetonka, Minn.-based Suncoast Motion Picture Co., which sells videos rather than renting them, was nowhere to be seen on the Video Store Magazine list. This year, it premieres as the nation’s second-largest video chain, with $1.5 billion in revenue at its 395 locations.

At the top is Blockbuster Video, which reported $2.8 billion in revenue. Blockbuster generated 80% of its 1996 revenue from rentals, but video sales now account for 20% of its business.

Huntington Beach-based Vide-O-lympix, with estimated revenue of $2.7 million, is the only Orange County-based chain on the magazine’s top 100 list. The biggest California-based chains are Super Duper Video in Upland, with $5.3 million in revenue, and Dollar Video in Camarillo, which reported $5.3 million in revenue.

Big discount chains like Wal-Mart, Kmart and Target also are getting in on the act when it comes to selling videos. Wal-Mart generated an estimated $1.3 billion in revenue from video sales, the magazine reports.

Greg Johnson covers retail businesses and restaurants for The Times. He can be reached at (714) 966-5950 and at greg.johnson@latimes.com