Family Video diversifies by offering movies with a side of pizza

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Posted: Friday, January 17, 2014 12:00 am

Omaha's last standing video stores are putting a new spin on dinner and a movie.

With most Blockbuster stores shutting their doors for good and the use of movie streaming services on the rise, Glenview, Ill.-based Family Video is making an effort to diversify the video rental business by adding carry-out and delivery pizza to its three Omaha area locations.

The Bellevue store at 709 Galvin Road South is currently under construction, with about 1,400 square feet of space partitioned off for a Marco's Pizza that's expected to open in March, Family Video district manager Michele Wolf said. Two other Omaha locations, one at 168th and Blondo Streets and another at 167th and Harrison Streets, added pizza locations in the spring and fall of last year. The stores have a window between Marco's Pizza and Family Video, where customers can order a pizza as they browse for a movie.

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The pairing sets Family Video apart at a time when widening options for rented, streamed and on-demand movies have pushed larger chains Blockbuster and Hollywood Video into bankruptcy and out of business. It's now the largest video and game rental chain in the country, with more than 775 stores in 19 U.S. states and Canada.

Eventually, Family Video's goal is to offer customers pizza and a movie, ordered online and delivered together, Wolf said. In the meantime, many customers simply pay for their movie over the phone and instruct the delivery driver to bring it along with their pizza. “It's happening already, so we're trying to make it as easy as we can for (customers),” Wolf said.

The pairing comes at a low cost to Family Video, which owns all of its store locations as opposed to leasing space. The stores don't need as much room for movies now that videocassettes are out and DVDs and Blu-rays are in, and Family Video President Keith Hoogland is a franchisee of Marco's Pizza.

The video chain committed $100 million to developing the Marco's Pizza stores about 2½ years ago, with a franchise agreement for 250 stores within seven years, according to a 2012 report by the Toledo Blade in Toledo, Ohio, where Marco's Pizza is headquartered.

The chain also has Nebraska stores in Columbus and Fremont, but those locations do not include pizza, Wolf said.

Wolf declined to share specific sales figures, but said Family Video stores with Marco's Pizza locations attached are seeing increased revenue. “The two businesses are helping each other out tremendously, but even in locations that don't have Marco's, store sales are still fantastic.”

Hoogland told the Huffington Post in November that Family Video has seen 30 consecutive years of same-store sales increases in revenue, sales and profits. In October, he said, the rental chain had its most successful month ever since 1978, with some store sales increasing by 4.5 percent.

Customer Phil Krohn stopped by Family Video last week to pick up some movies — one for him and one for his teenage sons. Krohn said he often uses the OnDemand feature that his cable provider offers, but the steep price for a 24-hour rental isn't always ideal for his family of five.

“With three kids and my wife, people don't always have time to watch them at the same time,” he said. “(Family Video) works out great. With the pizza now there, that's even another bonus. You can knock out two birds with one stone.

“It's a good fit for people who love movies, like our family does.”

Krohn said he has been a customer of other video stores in the past, including Blockbuster and Hollywood Video. When the Blockbuster at 156th Street and West Dodge Road closed, he began frequenting Family Video instead. He recently signed up for Netflix, but found the offerings were hit-or-miss. “Family Video has more of a selection,” he said.

Time of year is a factor as well. Krohn said his family probably uses OnDemand service more to rent movies in the winter, and visits Family Video more often in the summer. “We utilize both of them. Both have their advantages and disadvantages.”

So how does Family Video hold up as other chains collapse? Wolf said Family Video has capitalized on other video rental chains' demise. The Bellevue location was once a Hollywood Video that was “flipped” to a Family Video within a week.

In addition, the Hoogland family owns more than $800million in real estate, including most of its Family Video store locations, Wolf said. The company has developed more than 600 retail strip centers, often anchored by Family Video stores.

Rentals are less than $3 each, including new releases, and kids movies are free. Deals and specials are offered to customers who join its free membership program. The chain charges late fees — the price of what it would cost to rent the movie again — but movies can be renewed over the phone, Wolf said.

“We still have that personal touch,” Wolf said. “A machine can't help you when someone in the family has a medical emergency and you weren't able to return your movies.”

Correction: Michele Wolf's name was misspelled in a previous version of this story.

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