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IF I ONLY HAD A BUSINESS MODEL
December 20th, 2013 by Clark Humphrey

It’s Saturday Oct. 19. It’s Independent Video Store Day, an industrywide promotion similar to Record Store Day.

Scarecrow Video in the University District is packed with customers, there for special sales offers and cult-movie screenings.

Some of these are once-loyal customers who haven’t been inside Scarecrow, or any brick-and-mortar video store, in a long time.

The store needs them back, and on more than just one day a year.

Scarecrow Video is in trouble.

Not from the owners of the “Wizard of Oz” trademarks. That was quietly settled long ago, with the scarecrow in the store’s logo replaced by the silhouette of a flying crow.

And not from landlords. Store owner Carl Tostevin bought the building (formerly a stereo shop, and then a large Radio Shack) a while back.

No, what could kill the store that boasts of having “the world’s largest collection of films” are the same trends that killed Rain City Video, Hollywood Video, and even the once-mighty Blockbuster.

In the mid 1980s, during the first heyday of home video, attorney Fred Hopkins and record collector John Black had a little used record store, Backtrack, on the 25th Ave. NE strip north of University Village. Hopkins brought in a few dozen VHS tapes of ’50s horror and other cheesy B movies, for rent and for sale.

One day, regular customer George Latsois came in with some tapes of foreign and “art” films. Hopkins and Black agreed to stock them on Backtrack’s rental shelves on Latsois’s behalf. They rented well enough to encourage Latsois to start his own store.

Scarecrow Video began its standalone existence in an old commercial building south of Green Lake. Latsois quickly expanded to a second, then a third, adjacent storefront. He put everything he made and more into increasing his stock. Scarecrow, he decided, would be a destination store attracting customers from around the city and even the ‘burbs.

Latsois and a growing staff of film fanatics outgrew the Green Lake space. They moved to a bigger, and higher profile, location on Roosevelt Way, just off of the NE 50th Street freeway exit.

The U District was one of the city’s traditional film hubs. The Seven Gables and Metro cinames, and the Cinema Books store, were just down the street; the Neptune, Varsity, and Grand Illusion theaters were on or near nearby University Way; the UW itself had acclaimed film-studies programs and screening series. Scarecrow immediately became a major part, then an anchor, of this activity.

It was at Scarecrow that I first saw a DVD being played (the first Michael Keaton Batman). Within 10 years, the DVD format would render VHS (and the niche Laserdisc format) completely obsolete. Scarecrow, though, would hold on to hundreds of VHS titles that still haven’t come out on DVD.

Latsois kept expanding his selection. He tried to balance interesting but unprofitable titles with films in popular or niche-market genres (sexploitaiton, anime, old Hollywood classics). Scarecrow’s collection, already the biggest in Seattle, became one of the, and then THE, biggest in America.

But Latsois’s get-big-fast model caught up with the store’s finances. He was forced to seek buyers. He found them in 1998, in Microsoft managers (and loyal store customers) Tostevin and John Dauphiny.

Latsois died in 2003 in his native Greece; a wake at Scarecrow was attended by loyal customers dating from back in the Backtrack days.

With the backing of Tostevin and Dauphiny (who kept their Microsoft day jobs and didn’t take salaries from the store), Scarecrow continued to grow. To 23,000 titles, then to 80,000, then to almost 120,000.

Every available foot of space in the former stereo shop was turned into shelves. The main room’s collections of “auteur” directors became a labyrinth of tall shelves, separated by increasingly narrow passages. At Scarecrow, shopping for films was as much of an adventure as watching them.

Then came Netflix’s DVD by mail service. Then came streaming and on-demand services. Independent retailers like Scarecrow, which can’t afford the expensive rights (or the technical infrastructure) to stream movies, were cut off from that side of the buisness.

DVD rentals and sales tumbled. The big movie studios cut back their DVD release schedules. Video stores everywhere (independents, chains, big and small) began to disappear.

Tostevin (who bought out Dauphiny’s share) kept Scarecrow open, with a staff of 30. They added a coffee bar (“VHSpresso”), a screening room, and cross-promotions with art cinemas and neighborhood small businesses. They pushed the sales side of the business, and offered different rental specials each day of the week. It hasn’t been enough.

On Oct. 17, two days before Independent Video Store Day, Tostevin posted notice on the store’s website:

“Our rental numbers have declined roughly 40% over the past 6 years. This isn’t a huge surprise—obviously technology has been moving this direction for some time—but the decline has been more dramatic than we had anticipated.… Scarecrow has never been about making money, but it has to support itself. It’s no longer doing that, and hasn’t for a while.”

Scarecrow general manager Jeffrey Shannon told KOMO-TV that if revenues don’t pick up by year’s end, he and Tostavin might pursue a nonprofit, subscription-based model or other options. Completely closing, and disbanding the collection, remains one of those options.

In his website post, Tostevin didn’t ask for donations, just for his former regulars to “come back in” and buy and/or rent stuff; particularly during the upcoming holiday season.

One of the things you could buy is a Scarecrow T-shirt bearing the cartoon image of an anthropomorphic DVD disc and VHS cassette, smiling beneath the slogan VIVA PHYSICAL MEDIA.

(Cross-posted with City Living Seattle.)


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