SURGOINSVILLE — If you had told Merrell Graham 25 years ago that someday people would be renting and watching movies on their telephone, he might have laughed you right out of his newly opened Surgoinsville video rental store.
How about renting videos out of a big red Coke machine on the sidewalk? That would have sounded crazy in 1994.
Graham said he never could have predicted 25 years ago what would happen to the video rental industry, with the dawning of the internet age, live streaming and Red Box. Over the past decade, every major video rental chain basically went kaput.
According to a recent report, the last Blockbuster video store in the U.S. is hanging on somewhere in Oregon.
There's still one video store hanging on in Hawkins County as well.
It's called Cliffhanger Video on Main Street in Surgoinsville right beside the Dairy Mart — both of which are owned by Merrell and Jerilynn Graham.
How to survive in the video rental business
Merrell Graham told the Times News on Tuesday there are two main reasons he has managed to keep his video store going after nearly every other store has shut down.
Spoiler alert: One of those reasons is not the fact that Graham still stocks, and rents a substantial number of VHS tapes.
First, he has a loyal base of about 50 customers who still enjoy browsing the store, reading the back of the boxes and asking Graham for advice.
Graham is the town movie critic, and customers trust his judgment if he says the show is good.
"People don't like to take home a video and pay money for it and not like it," Graham said. "If they can get help from somebody in the video store, they appreciate it. People pretty well know if I tell them the movie is good it’s going to be good."
“I'm doing well enough to stay here”
Secondly, and most importantly, he doesn't have to rely on Cliffhanger Video for his livelihood. The Dairy Mart has been a Surgoinsville landmark for the past 34 years and anchors both businesses.
A slow month, or a slow decade, at the video store isn't going to kill Cliffhanger.
Graham said he needs to rent about 150-200 videos per week to make the business profitable. Right now he's averaging 125-150 rentals per week at $1.95 apiece.
"I have a lot of regular customers who come in, and Fridays and Saturdays are big nights when everybody rents movies," Graham said.
He added, "The video store goes good with the Dairy Mart, which is a very good business. If I didn't have the Dairy Mart, I would have probably closed up (the video store) a long time ago. I can't boast about making a lot of money with this. But I'm doing well enough to stay here, and that's really about all I'm doing. But I enjoy it, and because of the two businesses I stay here."
Cliffhanger Video is born
The video store building was originally a service station that was operated by Graham's father at one time. It was an auto repair shop until 1994, when Graham walled in the two bays to open the video store.
Graham was a movie buff and a video collector before opening Cliffhanger. He enjoyed collecting tapes of old episodic serials that used to play in movie theaters before the main feature.
For his money, the best serial of all time was the original “Lone Ranger” in 1937. What people remember most about those serials was they always ended in a cliffhanger that made the audience want to come back next week to see what happened.
That's where Graham got the name his store — Cliffhanger Video.
Biggest hits and surprising bombs
"When I started, all we had was VHS tapes, and a VHS movie cost me $61,” Graham said. “You had to rent them out a lot to get your money back. Of course they eventually went to DVDs. The last big movie that came out on VHS was 'Oh Brother Where Art Thou'. My business was good enough that I bought 28 copies of it. To this day, ‘Oh Brother Where Art Thou’ has taken in more money than any other movie I've got. It made nearly $3,000 in rentals."
The second-most rented movie at Cliffhanger was "Forrest Gump" at around $2,000, and Smokey and the Bandit has surprisingly been a top rental as well as a close third.
The movies that didn't rent well are sometimes surprising as well.
"The movies that let you down are like when the first ‘Star Wars’ came out or ‘Jurassic Park,’ ” he said. “You think those kind of movies are going to rent good, but they don't because people go out and buy them. They want them to keep. That's where I sometimes buy more movies than I needed."
“As far as picking one movie that's been really disappointing, I don't know. There's been a lot that were really disappointing. It's a gamble. Sometimes I'll think, this one won’t rent so I'll just get one copy. Then everybody in Surgoinsville wants to watch it."
Current movies that are moving out the door are the new “Aquaman,” the new “Mary Poppins,” “A Star is Born,” “Bohemian Rhapsody,” “Equalizer 2,” “Overlord” and the new “Robin Hood.” Superhero movies are always a safe bet.
“Times have changed”
"At one time, my average bill that I paid out for stocking the shelves with new movies was $3,000 (per month),” Graham said. “It was that good of a business. Now I get movies at Walmart, flea markets, wherever. At one time, we had about 200 regular customers that you would see all the time. Most of them are gone. Red Box and Netflix have taken them."
Although he stocks new release movies, you'll notice there aren't any new posters on the walls. Most of them are at least a decade old. Today he would have to pay $10-$15 for a new release poster.
In the glory days, he had a contract where he paid $100 per year to receive a poster with every new movie he purchased for the store.
He's still got boxes and boxes of old movie posters, and some day he's going to have a sale and get rid of them, along with advertising displays called standees.
Graham’s plan is to renovate the store and clear out a lot of the old things like posters and VHS tapes.
He’s going to keep the store open and hopefully get it looking like it did in its glory days.
“I've got a lot of big plans,” he said. “Of course, for the person renting the movie, all they want is to get the newest movies. And then I've got people who like old movies, and they come in every week. I've still got customers who will come in and rent three or four VHS videos. You can still rent a VHS here, but that's part of my project, to get them out.”
Aside from Red Box, Graham knows of two other video rental stores still operating in the region, one in Elizabethton and one in Greeneville.
“At one time, this store was a pretty good money maker. There used to be video stores everywhere, and they were all packed. Times have changed.”