ADDISON COUNTY — There was a day when renting out VHS tapes was almost as good as printing cash, said Terry Pellegrino.
Pellegrino, approaching 65, is known in Middlebury as the long-time co-owner of Video King, across the parking lot from Shaw’s Supermarket.
Last week, Pellegrino, a Castleton resident who with another five family members has operated a string of Video Kings in Vermont for more than 25 years, recalled the golden days of the movie rental trade.
“It was very easy to make money at this 30 years ago, 25 years ago,” Pellegrino said. “Anyone who went belly-up back then was not paying attention.”
During their chain’s heyday, the Pellegrino family operated a half-dozen Video Kings, in St. Albans, St. Johnsbury and Berlin as well as Middlebury; they also opened a store in Colchester before moving it to Waterbury.
Now, within weeks the Pellegrinos will close the Middlebury Video King; Terry Pellegrino said his Middlebury business grosses just half of what it once did.
Only the St. Albans and St. Johnsbury stores will remain, and Pellegrino said one reason the St. Albans shop keeps its doors open is because national rental chain Blockbuster left that city after it failed.
“They’re hanging in there. They’re doing decent,” he said. “They’re not as lucrative as they were.”
A dozen miles or so north of Video King, another movie rental shop, at 61 Main St. in Vergennes, is also nearing the end.
Monkton resident Diana Thut plans after 17 years to close Vergennes Video’s doors at the end of March. Both Thut and Pellegrino are still renting movies for a little longer, but will soon start selling off their inventory.
The central reason for the twin closings is no surprise to anyone who has watched Hulu or Netflix; downloaded a movie to a laptop computer, legally or not; or clicked on a video-on-demand choice from a cable or satellite service.
Thut said her business took a hit from the 2009 economic downturn, and with convenient Internet and other options becoming more and more popular, Vergennes Video never really recovered — she estimated her gross is down about 30 percent.
“That big recession hit,” Thut said. “That happened, and at the same time the Internet really kicked in with downloading and streaming.”
GRADUAL DECLINES
Pellegrino said he saw the rental market soften even before then. His best years came before Thut bought Vergennes Video in 1997, back when VCRs were at the peak of their popularity and a few adventurous movie-lovers were buying DVD players.
“Our high point was probably 1995 or so,” Pellegrino said. “That was almost 20 years ago now. And it gradually nosed down.”
Both point to pirated films as a problem as well as legitimate competition.
“The Internet is the killer. There’s so much. You have the Redboxes, and you have your Netflix,” Pellegrino said. “But the real killer, which people don’t realize, is the amount of bootleg stuff out there on the Internet.”
Thut said one person in her store recently had a thumb drive that he boasted contained 10 movies.
“I said they aren’t even out yet,” she recalled.
Then there is overhead. While Netflix might have a corporate headquarters, warehouses and fulfillment operations to back an international operation, small video shops must come up with rent, wages, insurance, utilities, workman’s compensation and more on top of inventory costs.
“That’s huge,” Thut said. “You’re going to run a store and you have to employ people and you have to place product there.”
Pellegrino at one point moved his store across the road for a couple years when his landlord wanted to raise the rent to what he considered an unreasonable level. Eventually he moved back across Washington Street when they reached a compromise that he felt his business could live with.
“We’ve always run very lean, kept our costs as low as we could, and put a product out there as low as we could,” he said.
CUSTOMER RELATIONS
Pellegrino is a businessman who along with other members of the family and their spouses in the late 1980s saw an opportunity in the video rental sector. He enjoys interacting with customers and takes pride in being able to remember their membership numbers.
He jokes that the fact that now it occasionally takes him a second to come up with those numbers is another reason that it’s time to walk away from a lease that will expire at the end of April.  
“I’m ready to retire, and the business is not as lucrative as it was,” Pellegrino said. “It’s not like we owe anybody in town. It’s not like we owe anybody bills. We could make it work. But it’s hard to make it work.”
Thut has worked with movies her entire adult life, starting at age 18 for 11 years with a Chittenden County firm that distributed films to video stores before buying her own shop in Vergennes.
She said matching customers with rentals has been one of the best parts of her workdays for the past decade and a half, especially when she could surprise them with her recommendations.
“I like to share movies. You see a good movie and you want to share it with people,” Thut said. “I’ll miss that, and I will miss the people.”
Pellegrino said he sees fewer people asking for advice — probably because they can learn so much about movies online.
“I think people almost have a purpose at this point,” he said. “They almost know what they want when they walk in the door. It’s not like it used to be. There’s so much more information.”
Both agree something will be lost with the demise of small video stores.
Thut said as well as the advice, the personal touch will be gone. 
“They lose coming in and interacting with people. And not just the clerks,” she said. “It’s kind of a meeting place.”
Pellegrino said the “local flavor of people interacting on the floor” would be missed, but he just didn’t see a future for shops like his and Thut’s.
“A video store is much less necessary than it used to be, in all honesty,” Pellegrino said. “It’s kind of like the blacksmith of the old days.”
LOOKING AHEAD
Pellegrino and his wife, Susan, a regular behind the counter in recent years, will be spending more time at their lakefront home in Castleton. It was built on part of what was a family farm, and Pellegrino said it serves as a reminder that overall the video business has served them well.
“That’s why we have a place on the lake,” he said.
They will travel more. Susan Pellegrino pointed out a typical shopkeeper’s lament — they have taken five vacations in 25 years.
“You can say we deserved them,” she said.
Terry Pellegrino said he hesitates to say it as a longtime Vermonter, but he can see the couple as snowbirds.
“I’d like to go south for the winter. It’s an awful sad thing to admit,” he said.
Susan Pellegrino sounded less hesitant about that plan.
“Who wouldn’t like warmer weather?” she said.
Thut, who is younger, said she would return to the workforce. She said she worked on the side in recent years, and will continue to do so until she can find a full-time job.
“That will hold me over,” she said.
The video business will be hard to leave behind, Thut said. She has already made sure her favorite movie, a classic Mel Brooks comedy, will not be part of Vergennes Video’s upcoming sell-off.
“Young Frankenstein” will go home with her.
“I grabbed that off the shelf before anyone could get it,” Thut said.
Andy Kirkaldy may be reached at [email protected].
VERGENNES VIDEO OWNER Diana Thut is closing the store after operating it for 17 years.   
Independent photo/Trent Campbell