As far as the video rental business goes, it is the best of times, and it is the worst of times.

It is the best of times for the Family Video franchise, which is building a store a week across the country, and Redbox, which continues to deepen its niche in the video rental market.

And it is the worst of times for Blockbuster Video, which has lost $4.5 billion since 2001 and is closing a good number of its 7,500 locations but is rebranding itself in an attempt to stay afloat.

Whether things are good or bad, every video rental chain that’s involved keeps a close eye on the Internet, which threatens to turn the brick-and-mortar video store into antiquities but has been slow to develop. That hasn’t stopped many companies, though, from offering online alternatives to the traditional trip to the store.

The bad

Take Blockbuster, which experienced a major boom in the 1990s but has quickly lost market share to Internet and mail rental services. The video rental chain has started redesigning some stores to offer video games, TV sets and expanded snack areas with cafes, while a deal was recently struck with Live Nation inc. to be the concert ticket seller’s primary brick-and-mortar sales outlet.

Even with less than 10 percent of ticket purchases being made face-to-face, Blockbuster executives feel the move will give people one more reason to stop in.

“This is another step in the right direction,” James Keyes, Blockbuster’s chief executive, told The Associated Press. “It helps reinforce what Blockbuster really is trying to do — provide the most convenient access to entertainment and media.”

The chain wants movie renters to have a reason to come to the store, as the Netflix mail rental service has seized around 12 percent of the total rental market (Blockbuster does, however, offer its own mail service, which includes the ability to drop a video off at a store and pick up a new one immediately).

Both companies have also ramped up their efforts to offer further convenience, as well. Netflix recently finalized deals to offer streaming videos via the Xbox 360 and TiVo, as well as a custom-made device for that purpose, while Blockbuster just announced plans to debut a similar device that will store videos that have been downloaded.

Although Blockbuster has closed hundreds of stores in recent years, its expansion into on-demand shouldn’t be interpreted as a condemnation of its brick-and-mortar locations, Keyes said.

“We think the stores will remain relevant to consumers for quite some time,” he said.

The good

That certainly is the case for Family Video, the Illinois-based franchise that was started in 1978 and now claims more than 600 locations, including several that have popped up in Western New York in the past few years.

Why expand into a region that has seen Hollywood Video and DVD Dot drop out in the past couple years? According to the chain’s regional director for New York state, Todd Bezenah, the rental business is quite lucrative here if a company knows how to treat customers.

“In the industry, we kind of laugh at everybody who says that the video business is dying,” said Bezenah, who cited his chain’s recent free rental campaign as part of its 30th anniversary celebration. “We’ve expanded like crazy.”

That expansion encompasses 22 locations statewide, including a store on Colvin Boulevard in the Town of Tonawanda and two in Niagara Falls. Plans are also in the works, he said, to build a new location in Dunkirk, with future construction possible.

Chris Lorenz, manager of the chain’s Town of Tonawanda store, said what will bring customers to one source over another is their experience with that source.

“The movie are the appeal themselves, and what keeps people coming in is the customer service,” he said. “I like the one-on-one interaction with the customer. This is personal.”

Beyond human interaction, the traditional rental method will persevere, Bezenah said, because of the last-minute nature of this form of entertainment.

“The average person decides that night to rent a video,” he said. “You’re not going to fire up Netflix and get a movie that night ...

The (Internet) technology isn’t there, and it won’t be there for five, 10 years. It takes six hours to download a movie.”

Another rental chain promising near-instant gratification is Redbox, which operates kiosks placed outside supermarkets and other buildings and recently placed boxes in North Tonawanda, Grand Island and Niagara Falls.

Gary Lancina, the company’s vice president of marketing, agrees with Bezenah that the tried-and-true rental method remains popular.

“While emerging technologies such as digital downloads are a popular topic these days, the truth is, research shows that current limitations on content and price point leave many consumers only mildly interested in these new services,” he said in an e-mail.

With more than 12,000 boxes in service and future expansion coming, the Colorado-based rental company sees a similarly bright light at the end of the tunnel. That light is fueled by cheap prices ($1 per night rentals) and easy access, according to Lancina.

“Redbox’s success is driven by our value and convenience,” he said in an e-mail. “Redbox is now even more convenient in Buffalo, more than doubling its presence with 28 new kiosks added since the beginning of the year ... with rising theater prices, research indicating consumers are looking to reduce entertainment costs and the current economy, Redbox offers consumers incredible entertainment at a great price while appealing to all ages and lifestyles.”

That mantra also holds true at Family Video, which offers free kids’ rentals and numerous two for $1 rentals. Low prices make these chains a cheaper option than Blockbuster, which might have a better selection but typically rents movies for more than $4. Most of Netflix’s plans involve unlimited monthly rentals, with the difference being how many titles can be out at once, while most downloadable movies are available in the $1-$4 range.

The future

Sales of those downloadable movies, which amounted to just $111 million in 2006, are expected to top $1.2 billion this year and $4.1 billion in 2011, according to Adams Media Research. The recent ventures by Netflix and Blockbuster will help fuel this, with Apple’s iTunes and other services already offering streaming videos to rent.

Such rental avenues are increasingly being used by younger viewers, according to a report conducted by The Diffusion Group. The report found that only 30 percent of adult broadband users are comfortable downloading movies from the Internet, but that it’s these same older viewers who frequent actual video stores.

“As younger, more tech-affluent consumers age, they inevitably bring with them their unique rental habits, implying that brick-and-mortar stores will continue to become less popular as time goes by,” the report said.

While still feeling out the online market, chains such as Redbox and Family Video have started offering some Blu-Ray high-definition DVDs to offer consumers the best possible viewing experience. Representatives from both companies said they will explore Web offerings when they become more readily applicable, but the focus for now will remain on low-priced, tangible products.

“We are prepared to leverage our unrivaled network of locations, expansive customer base and proven technology to offer consumers these emerging technologies if and when the demand is there,” Lancina said.

“We exist for cheaper entertainment,” Bezenah said. “We’re kind of recession-proof in times like this.”

Contact editor Paul Laneat 693-1000, ext. 116.