How an Oregon rental shop grew into Blockbuster's only real rival
Hollywood Entertainment Corporation opened its first video store in October 1988. For most of the 1990s the company grew the obvious way, by putting a big, bright store across the road from whatever Blockbuster had already built.
The strategy worked. As of December 31, 2004, Hollywood Entertainment operated 2,006 Hollywood Video stores in the United States, according to the annual report it filed with the Securities and Exchange Commission. Revenue that year was $1.782 billion.
There was a second business running inside the same walls. The 2004 filing also counted 715 Game Crazy departments, the used-game counters where customers could trade in titles the way they did at GameStop, without leaving the rental aisle.
That combination made Hollywood Entertainment the number two video rental company in the country, and the only chain with enough locations to give Blockbuster a real fight. It was also, by 2004, a company whose entire model assumed people would keep driving somewhere to pick up a plastic disc and then drive back to return it.
The $1 billion deal that took down both companies
In 2005 the chain was bought by Movie Gallery, a rental company based in Dothan, Alabama, that had built its business on small towns and strip malls rather than dense suburbs. The price was about $1 billion.
On paper the two halves fit. Movie Gallery had rural coverage, Hollywood Video had the metro stores, and together they were second only to Blockbuster in the United States.
The balance sheet is what broke. On October 16, 2007, Movie Gallery filed for Chapter 11 bankruptcy protection after months of struggling with the debt from the Hollywood Entertainment purchase. In its filing in the US Bankruptcy Court for the Eastern District of Virginia in Richmond, the company listed debts of between $500 million and $1 billion against assets of between $10 million and $50 million.
Movie Gallery announced plans to shut roughly 520 unprofitable stores and asked the court for $150 million from Goldman Sachs to fund operations during the case. Its chief restructuring officer, Steve Moore, told the court the company faced "looming defaults" on its loan agreements.
Why the second bankruptcy ended in a full liquidation
Movie Gallery came out of that first bankruptcy in 2008 and went back in less than two years later. It filed for Chapter 11 again in February 2010, and this time the pressure was not coming from another chain of stores.
It was coming from the mail, from vending machines and from broadband. Netflix was shipping discs to the door, Redbox kiosks were charging a dollar a night outside grocery stores, and streaming was starting to make the drive itself look silly.
In May 2010 the company, by then based in Wilsonville, Oregon, filed a notice with the bankruptcy court saying it would close its more than 1,900 remaining stores and liquidate. The agreement told the court the shutdown was in the "best interests" of the company and its creditors.
Game Crazy went with it. So did the rental accounts, the membership files and roughly two decades of late-fee records, which turned out to be the most durable asset the company had.
What is left of the chain in 2026
Nothing operating. No Hollywood Video store has rented a movie in the United States since the 2010 liquidation, which makes 2026 the sixteenth year the brand has existed only as signage ghosts and search traffic.
There is no successor chain either. Hollywood Entertainment was absorbed into Movie Gallery in 2005 and Movie Gallery was wound down in 2010, so the name is not attached to a working rental business anywhere.
What survives is paper and plastic. Laminated membership cards, employee name badges, promotional standees and the yellow-and-black clamshell rental cases all left the stores during the going-out-of-business sales and ended up in collectors' hands.
Where to find one today. Hollywood Video memorabilia turns up on Etsy's search page for Hollywood Video memorabilia, mostly membership cards, badges and rental cases. Prices swing widely by condition and by how much store branding is on the item, so check recent sold listings before paying up for anything described as rare.
The late fees that outlived the company
When Hollywood Video and Movie Gallery were liquidated, the estate still held a mountain of unpaid rental charges. The approved plan created a liquidating trust to collect an estimated $244 million reportedly owed by 3.3 million customers.
Those accounts were handed to debt collectors, and the complaints started almost immediately. Former customers said they were being billed for fees they had never been told about, and in many cases the first they heard of it was a rejected credit application.
Mary Lobdell, an assistant attorney general in Washington state, said her office "received a flurry of complaints from Washington residents who told us they didn't owe the fees," in the 2011 announcement of the resulting settlement.
That settlement, signed by the attorneys general of all 50 states and the District of Columbia, required the trust to rescind adverse credit reports, to stop collection whenever a consumer disputed a notice until the account was verified, and to collect only the lesser of a late fee or a product fee rather than both.
Which video rental chain actually lasted the longest
Not Blockbuster, and not Hollywood Video. The last national video rental chain in the United States was Family Video, owned by Highland Ventures, which kept renting movies for more than a decade after the 2010 liquidation.
It stopped on January 6, 2021. Family Video announced it would end rentals and close its remaining stores, roughly 250 of them, after the pandemic emptied its aisles and the studios stopped releasing the new titles that drove rental traffic.
Keith Hoogland, the chief executive of Highland Ventures, put it plainly in the announcement reported by Variety in January 2021: "The impact of COVID-19, not only in foot traffic but also in the lack of movie releases, pushed us to the end of an era."
That is the honest end of the format. Hollywood Video lost to the mail and the kiosk in 2010, Blockbuster shrank to a single store, and the chain that outlasted both was finished off by a year with almost no new releases to rent.
Frequently Asked Questions
When did Hollywood Video close?
Hollywood Video closed in 2010. Parent company Movie Gallery filed for Chapter 11 bankruptcy protection in February 2010 and then told the bankruptcy court in May 2010 that it would close its more than 1,900 remaining stores and liquidate. No Hollywood Video store has operated in the United States since that year.
Who owned Hollywood Video?
Hollywood Video was owned by Hollywood Entertainment Corporation, which opened the first store in October 1988 and ran 2,006 Hollywood Video stores in the United States as of December 31, 2004. Movie Gallery, based in Dothan, Alabama, bought Hollywood Entertainment for about $1 billion in 2005 and owned the chain until the 2010 liquidation.
What was the last video rental chain in America?
Family Video was the last national video rental chain in the United States. Owned by Highland Ventures, it stopped renting movies on January 6, 2021 and closed its remaining stores, roughly 250 of them, eleven years after Hollywood Video and Movie Gallery were liquidated in 2010.