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May 21, 2004

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Palo Alto Online

Publication Date: Friday, May 21, 2004

Midtown Video reaches 'The End' Midtown Video reaches 'The End' (May 21, 2004)

New ways to rent DVDs spell demise of neighborhood video store

by Jocelyn Dong

When the late Wilson Nicholls opened Midtown Video in 1985, jumping on a trend of video-rental stores, he predicted his operation would not last forever. Technology would eventually change, he said, and put an end to his humble enterprise.

This week, after a 19-year run, Nicholls' prophecy came true.

The mom-and-pop store in Midtown Shopping Center closed its doors for good on Thursday, the victim of changing times and people's shifting habits.

Over the years, the video store gained a following for its unique collection of movies, at one point hailed for stocking "the most eclectic selection of foreign films" from Santa Monica to San Francisco by Metro Newspapers.

For three years in a row, from 1997-99, Palo Alto Weekly readers also voted Midtown Video the best place in town for foreign-film rentals. Even as it closed this week, its inventory included about 1,000 titles from 36 countries, as well as thousands of U.S.-made films.

The store's demise took many customers by surprise.

Callie Elliston stopped by on Tuesday and was upset by the news. For a dozen years, she and her family turned to Midtown Video for everything from dramas to video games. Her kids even biked there.

"It's just distressing news," she said. "It's a fabulous video store."

Employee Jim Garcia, meanwhile, had taken to the phone, spreading the word to Midtown Video's most loyal customers.

"It's heartbreaking," he said.

But Laurie Garcia, Midtown Video's store manager and a part owner, said it's no surprise. The store's majority owners -- relatives of Nicholls, who passed away in 2001 -- had been considering closing the struggling operation for months. They opted to shut down the store within days.

The rising popularity of mail-order rentals, such as Netflix, and the ease of video-on-demand services from cable and satellite companies were partially responsible for the store's demise, Laurie Garcia said.

The advent of DVDs has revolutionized video consumption as well: People are buying, not just renting. Unlike VHS tapes, DVDs are marketed for sales, Garcia said, and low prices make them a better bargain than ever before.

In 2002, consumers spent $8.7 billion to own DVDs and $3.4 billion on VHS tapes, according to the Video Software Dealers Association, an industry trade group. Even DVD rentals are rapidly taking over market share. Consumers spent $2.9 billion renting DVDs in 2002, more than double the previous year.

Garcia considered converting the store's stock to all-DVDs, but replacing the VHS tapes, especially the hard-to-find foreign flicks, would have been too costly.

Not only that, but Midtown Video has always filled a niche, offering cult films and classics. Stocking all the popular DVDs would have pitted the store against giants like Blockbuster.

"There was no way we could survive," she said Tuesday, sitting in the tiny rear office with movie posters plastered on the walls. In the stock room, numbered brown plastic VHS cases filled the shelves, looking like artifacts from a quickly vanishing age.

Garcia, 36, grew teary as she talked about the store. Midtown Video has been her whole career; she started working there when it first opened. After years of chatting over films they've loved or hated, customers have become like family.

With the shop's closing, an era that Nicholls founded has come to an end, she said. Hundreds of teenagers, like Garcia, worked their first jobs at Midtown Video, or at Baskin-Robbins next door, which Nicholls also owned for 18 years.

A liquidation company has been contracted to sell the store's inventory, starting on Thursday, May 27. Customers may be able to use old Midtown Video coupons toward video purchases, Garcia said.

Midtown Video's closing leaves a single independent video-rental place in Palo Alto, Best Video. Coincidentally, it is located in Midtown Shopping Center.

Best Video owner Aung Ouyang admitted that mail-order rentals like Netflix have provided him competition, but he maintained that his business is good.

Friday is Garcia's last day, although the shop will not be open to the public. Eight part-time employees are also being let go. For customers who missed saying goodbye, Garcia said, the store's e-mail,, will be operational for awhile.

A simple, white flier posted on the front door this week, announcing the store's sudden closure, was addressed "To our loyal customers."

"Thanks," it read. "We'll miss you."

Senior staff writer Jocelyn Dong can be reached at

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