Brick-and-Mortar Video Store Survives by Catering to Japanese Locals

By Jennifer Ha

The aisles of High Quality Video Inc., a video store on 21 West 45th Street in Manhattan, are narrow and dimly lighted. The shelves are dark, with a bluish hue illuminating their trove of thousands of movie titles.

The video rental industry is dying, but High Quality Video, which specializes in Japanese movies, has managed to hold on. In recent years, though, a raft of challenges, from streaming video to high rental costs, make the company an object lesson in why even the most specialized video rental businesses have a hard time surviving.

High Quality Video has been renting and selling Japanese variety shows, dramas, cartoons, news programs, movies, cooking shows, documentaries and adult films, for more than 20 years. Founded by Hirofumi Imoto in 1990, it operates in two main locations, New York City and Santa Monica, Calif. It makes most of its money renting DVDs at eight local supermarkets. However, it is the inventory at the company’s second-floor 45th Street location that keeps customers coming back.

High Quality Video rents DVDs for $2 to $5, depending on the length of the rental and whether it is a Japanese DVD or one from another country (the latter are more expensive). It also sells some DVDs for $4.75 each.

Before opening his video store in New York, Imoto, was a bullet-train conductor in Japan for three years. “It was boring and tedious being a bullet-train conductor, every day is the same,” says Imoto, adding that the one thing he hated more than anything else was working for someone else.

To make matters worse, Imoto lived in the countryside, where not much was going on. So he listened to American jazz, watched American movies and dreamed about starting his own business.

It is difficult to be an entrepreneur in Japan—start-up funding is hard to come by and the lifetime employment system discourages many people from starting their own businesses, because, if the entrepreneur fails, it is difficult to find another job.

Imoto figured it would be easier to start a business in the United States, but he felt it needed to be a unusual. When Imoto arrived in New York, in the ’80s, there were many video stores, but not one of them catered to the relatively affluent émigré Japanese community. With his savings and a few bank loans, Imoto opened shop at his home in Fresh Meadows, Queens. Employees came to work at his house, distributing, packing and delivering videos to supermarkets.

Several years later, as sales improved, Imoto moved the business to his first midtown location, where customers could browse among thousands of Japanese and foreign titles he kept in stock.

Most of Imoto’s customers are Japanese professionals–or their families–who work and shop in Midtown, where many Japanese specialty shops are situated. So even though the supermarket stalls offer the most recent DVDs, customers stop by the store. “I’m in the city more than I am in Queens because I work in the city, and hang out there,” says Keiko Watanabe, 26, who says she frequently rents dramas from High Quality Video.

Adds Ken Kawamoto, 50, who described himself as a businessman: “I first heard about this place from one of my friends back around the mid-’90s. It was the only place where we can rent Japanese videos back then. They always have pretty good titles, so I always come here.”

High Quality Video also carries a variety of popular Asian and American titles, all with Japanese subtitles. One customer, who asked not to be named, says he likes High Quality Video because of the variety and customer service and always asks for recommendations.

While High Quality Video’s specialty has enabled Imoto to hang on where many other brick-and-mortar video rental stores have gone out of business, it has been a roller-coaster ride in recent years. The economic downturn hurt High Quality Video, as some customers returned to Japan.

Streaming video also has eaten into his rentals, as it has for most video stores. Web sites such as and make it possible to download Japanese television dramas for free—though many of these are illegal copies. Customers can also download movies—some of which are bootleg copies—for free at While Netflix does not carry Japanese television dramas or foreign films with subtitles, it does offer some Japanese-language films.

Many of Imoto’s customers prefer to rent from him because downloading and streaming content can be troublesome; they are also concerned about the quality of downloads and prefer not to break the law. Studies have shown that the majority of the people will continue to use DVDs at home because many people already own a DVD player, which are relatively inexpensive.

Oddly, the video rental business is vulnerable to bad weather. The December and January storms hit the business particularly hard, as customers wouldn’t go out to rent the DVDs. And summers are tough, whatever the weather, because many Japanese expatriates travel home to visit families and friends.

The worst period, however, was from 2001-2004. High Quality Video lost a lot of business during those years because of the Sept. 11 attacks. Imoto found that some of his customers had moved back to Japan because of the attack.

These days Imoto’s biggest challenge is paying the rent for his retail store, which he says is by far his biggest expense. In 2009, when the landlord tried to raise his rent, he moved to his current, smaller location, where he pays about $10,000 a month. For the supermarket locations, instead of paying rent, he shares the rental income with the store. He also faces competition from the Midnight Video Company, a relatively new video store two blocks away.. Although Midnight Video is smaller, it still stocks a good variety of DVDs at prices identical to High Quality Video’s. One customer, who gave her name only as Erika, says she prefers Midnight Video because the customer service is better. “Every time I go in, I get greeted. There are always workers on the floor, so when I need help, it is easy for me to reach them.”

Erika says it’s sometimes hard to get the staff’s attention at High Quality, because there are few employees. Although Midnight Video is her go-to place, she winds up occasionally at High Quality Video, as she did one evening in April, because Midnight Video didn’t have what she is looking for.

For Imoto, customer service means he hires only hires native Japanese, to ensure their fluency. But that also means high employee turnover, because his employees typically are in New York for short-term stays and leave when their visas expire. Still, he says, he likes this approach because he can be certain that his staff can talk to the customers, listen to them and offer them recommendations.

Facing all these challenges, High Quality Video has a number of strengths. One is its audience: according to a Motorola study published last November, people in the United States and Japan watch the most television, clocking in at 21 hours a week.

In addition, the Japanese have the disposable income to satisfy their habits. Although the Japanese accounted for only 3 percent of New York’s Asian population as of 2000—the last date for which Census figures are available—the median income of U.S. residents from Japan over the age of 25, is $60,000, well above that of the average American. According to the Census Bureau, the Japanese population in New York City was about 22,000 in 2000. Seventy-three percent of local residents who identify themselves as Japanese were born in Japan and say they prefer to watch movies in Japanese.

Imoto says the niche he has carved out will allow High Quality Video to survive at least until he retires. “My customers are loyal and we pride ourselves in customer satisfaction,” says Imoto. “We have been around the longest, and many people know about us and what we do. People will always watch TV.”

But Imoto is not encouraging his two daughters to take over the business. After all, changing technology is likely to put most video rental stores out of business within the next decade or so.