Hollywood Video
| Company type | Public (until merger) |
|---|---|
| Industry | Video rental |
| Founded | 1988 |
| Founder | Mark Wattles |
| Fate | Merged with Movie Gallery, Inc. in 2005 |
| Successor | Movie Gallery, Inc. |
| Headquarters | Wilsonville , United States |
Area served | United States, Canada |
Key people | Mark Wattles (founder, president, CEO) |
| Products | Video rentals, DVD rentals, video game sales and rentals (GameCrazy) |
Number of employees | 170 (1996) |
'Hollywood Entertainment Corp., commonly referred to as Hollywood Video, was a prominent American video rental chain based in Wilsonville, Oregon. Established by entrepreneur Mark Wattles in 1988, the company experienced swift growth following its initial public offering in 1993, eventually becoming Blockbuster’s primary competitor within urban markets.
During the late 1990s, Hollywood Video was among the first to offer DVD rentals in-store and broadened its presence into online retail by acquiring Reel.com in 1998. To counteract losses in the early 2000s caused by the emergence of video on demand, the corporation diversified its offerings by launching GameCrazy, a retail concept focused on video game sales and rentals.
Following a hostile takeover bid from Blockbuster, Hollywood Entertainment merged with Movie Gallery, Inc. in April 2005 for $1.2 billion. Although this merger initially bolstered Movie Gallery’s financial standing, the resulting debt load played a significant role in the company’s bankruptcy and eventual liquidation by 2010.
Operations under the Hollywood Video brand ended by mid-2010. The company’s website was revived as an entertainment news platform in December 2011 but has remained inactive since October 2014.
History
In 1984, Mark Wattles left college facing financial difficulties. After receiving a VCR from his parents, he recognized an opportunity within the video rental industry. In 1985, Wattles secured financing to launch Home Theater, a modest 500-square-foot rental outlet located in downtown Portland, Oregon that carried a collection of 300 films. By 1988, he had founded Hollywood Entertainment, assuming roles as president and CEO while expanding store locations into Washington, California, Nevada, and Texas.
Hollywood Entertainment went public in 1993 with a total of 16 stores. By 1994, each store averaged approximately 7,500 square feet and maintained inventories of around 16,000 tapes, occasionally stocking up to 70 copies of high-demand titles. Individual stores generated roughly $1 million in annual revenue, with plans to open an additional 78 locations during 1995.
In January 1995, Blockbuster initiated legal action against Hollywood Entertainment seeking $10 million over allegations that five former employees hired by Hollywood had taken proprietary trade secrets. At that time, Hollywood operated 117 stores compared to Blockbuster’s 2,800 outlets and ranked fourth nationally in sales volume. A court ruled in favor of Hollywood in May 1995.
By June of the same year, Hollywood Entertainment managed 153 stores across eleven states under multiple brand names such as Video Park and Video Central. The company announced intentions to triple its store count by late 1997. In August 1995, it completed the acquisition of the Midwest-based Video Watch chain comprising 42 stores for $59 million, finalizing its targeted regional acquisitions. Later that year, Hollywood planned to open 90 new stores in Michigan over three years and over 200 additional locations throughout 1996.
In 1996, Hollywood established regional offices in Chicago, Houston, and the San Francisco Bay Area to facilitate continued expansion efforts. Julie Wainwright took over as CEO of Reel.com after replacing founder Stuart Skorman. In July 1998, Hollywood Entertainment purchased Reel.com for roughly $100 million, including $30 million paid in cash to shareholders. Reel.com maintained independent operations under CEO Wainwright until she was succeeded by Jeff Jordan.
Merger with Movie Gallery, Inc., and Bankruptcy
In December 2004, Hollywood Video encountered an unsolicited acquisition proposal from Blockbuster Video, which valued shares at $14.50 each—comprising $11.50 in cash and $3.00 in stock. To counter this offer, Hollywood Video agreed in January 2005 to be acquired by the smaller rival Movie Gallery. The transaction involved Movie Gallery paying $860 million, equating to $13.25 per share, while also taking on $380 million of Hollywood Video’s debt. Subsequently, Blockbuster withdrew its bid, citing concerns related to antitrust regulations. The acquisition was finalized on April 27, 2005, resulting in Hollywood Video becoming a subsidiary of Movie Gallery, which initially kept the company's headquarters in Oregon before eventually moving it to Wilsonville.
The final Hollywood Video outlet in the United States ceased operations on July 31, 2010, with the last Canadian store closing shortly thereafter on August 8, 2010.
In December 2011, the website hollywoodvideo.com was relaunched as a movie news aggregation platform utilizing an automated "social scoring algorithm" to compile entertainment-related content. Initially featuring editorial blogs, by April 2013 the site transitioned exclusively to editorial material and incorporated a search tool allowing users to browse and purchase films through Amazon.com.
Headquarters
Hollywood Video’s original corporate offices were located in an 85,000-square-foot building situated in Beaverton, Oregon. Two years into a five-year lease signed in 1996, the company vacated this facility, permitting Poorman-Douglas Corp to assume the lease and thereby relieving Hollywood Video from ongoing rental payments.
Following this move, Hollywood Video entered into a long-term lease agreement for a larger 166,000-square-foot building in Wilsonville, Oregon. However, under CEO Mark Wattles’ direction, the headquarters were soon relocated to a former Smith's Home Furnishings property also located in Wilsonville. By 1996, approximately 170 full-time staff were employed at this site. This 173,000-square-foot building was vacated by October 1998 and subsequently put up for lease.
In 1997, Hollywood Video contemplated relocating its offices due to Wilsonville’s restrictions on neon signage, which conflicted with the company’s branding approach. City officials stated that neon lighting did not align with the aesthetic standards of the Wilsonville Business Park.
In January 1999, Trammell Crow Co. acquired the former Thrifty Payless Inc. headquarters—a 77-acre property—for $25.5 million. The firm subdivided and sold off portions of the land while retaining ownership of an $8 million headquarters building measuring 120,000 square feet. Hollywood Video leased this facility and continued to maintain its corporate headquarters there in Wilsonville.