Kitsap customers have fewer options when it comes to movie rentals.

The success of Netflix, Redbox and online movies led to a dive in business at several of the county’s rental stores, those in the industry say.

Two Hollywood Video locations are the latest among Kitsap stores to close.

Three of the company’s Kitsap stores were liquidated earlier this year, and hundreds are shutting down nationwide.

Four branches of Total Video have also closed in Kitsap in the last three years, leaving only one Total Video, in Bremerton.

Hollywood Video’s parent company, Movie Gallery Inc., filed bankruptcy in February. Sale and liquidation signs were posted at Poulsbo’s Hollywood Video on 10th Avenue about a month ago. Its movies are no longer for rent. Instead, they are for sale at discounted prices.

Employees confirmed the store is closing but weren’t sure exactly when, and said they’re not authorized to speak to the press. An automated message on a media line for the company said according to policy, representatives are “for the most part not responding to media inquires.” A phone message left on the line was not returned.

Employees at the Bethel Road Hollywood Video in Port Orchard are telling customers the store will be closed in about a month.

Total Video owner Gary Lundy said video on demand systems and a drop in sale prices have also contributed to a decreased brick-and-mortar rental industry. At the peak of business he ran five stores in the county, but is now down to his last on Kitsap Way. He opened his chain 24 years ago.

“It’s nothing compared to what it used to be,” Lundy said. “This business is just competing with too many other players.”

To adjust, Lundy cut the remaining Total Video’s square footage in half.

At one point Lundy employed 70 people. Now he has five employees.

“It’s the worst nightmare a businessman can have to wind down and close businesses and lay people off that have worked for you for long periods of time,” he said.

He doesn’t predict a turnaround, and expects over the next few years many or all video rental stores will close.

Blockbuster handed an early blow to competitors by doing away with its late fees in 2005. In 2006 it offered its customers the option to choose movies online and receive them by mail, similar to Netflix. The county’s three Blockbuster stores, in Bremerton, Silverdale and Port Orchard, remain open, despite reports the company’s shares have fallen.

Netflix Inc. ships an average of 2 million DVDs per day to its nationwide customers, who receive rental movies in the mail for a monthly fee. The company announced it had 14 million members in March.

Netflix sales rose 25 percent in the first quarter of 2010 to $493.7 million. It added 1.7 million subscribers in the first quarter alone, and expects to have more than 17 million by the end of 2010, according to a press release.

Netflix started service in 1999.

On its tail, Redbox Automated Retail LLC began testing its concept in 2002. Redbox allows customers to choose rental DVDs via touch screen and pay a $1 charge with a swipe of their debit or credit card. The company has since rented out more than 750 million videos.

There are 20 Redbox kiosks in Kitsap, many of them in large chain stores such as Walgreens, Albertsons and Walmart, according to Redbox.com. There are nearly 25,000 of the kiosks nationwide.

Earlier this year, management at Redbox parent Coinstar predicted $1.5 billion in yearly sales revenue by the end of 2010.

Kingston’s Peninsula Video and Bainbridge Island’s Silver Screen Video are two of the last independent rental stores in Kitsap. Jerry Clark, owner of Silver Screen, said business isn’t as easy as it used to be.

“It’s tough,” he said, listing online movies, Netflix and cable as each having taken a cut out of what he calls the industry’s “pie.” There are no Redbox kiosks on Bainbridge Island, though a nearby Safeway rents out movies.

Silver Screen survived by cutting down the store space it rents and cutting back staff, Clark said. He also offers rental specials and sells used DVDs online.

The store has 20,000 titles and one of the largest collections of foreign and classic films in the state. It has been at its Hildebrand Lane location since the late 90s.

Clark said in-store service can’t be duplicated online, and his customers find more to glean when an employee tells them about video titles than what they would find in online descriptions.

He and his son, Jeff Clark, the store’s general manager, said they know the industry is changing, but they’ll keep their doors open as long as it makes sense economically.

“We’re not going anywhere,” Clark said. WU