Craig Mitchelldyer, Getty Images More viewers are getting their videos from places other than traditional stores such as Blockbuster. Click photo for larger image. Previous story: Bankruptcy forces nine local Blockbuster stores to close (07/15/06)

Earlier this month, Catherine Burnett Kelley interviewed for a position at the Blockbuster franchise on Rodi Road in Penn Hills. The owner of her own video rental store, Classic Video in Shadyside, was looking for a way to supplement her income.

So while it was a shock when nine Pittsburgh-area Blockbuster stores, including the one at 202 Rodi Road, abruptly closed last week after the franchisee filed for bankruptcy, it wasn't exactly a surprise. "The video [rental] business is really suffering," Ms. Kelley said yesterday. "People are watching movies differently."

Thirty years ago, videos offered a new way to see movies at home and consumers flocked to rental stores. Now, customers get DVDs in the mail, use on-demand cable TV service or just buy the films at big-box stores, where prices for new DVDs can be about what it would cost to rent them three or four times.

All those choices have forced the industry to adapt -- and some players are handling the evolutionary demands better than others.

The overall video industry is growing, said Sean Bersell, vice president of public affairs for the Entertainment Merchants Association, in Encino, Calif. Sales of videos in both VHS and DVD format rose from $6.8 billion in 1999 to $16.05 billion last year, he said, but that growth did not gut the rental market. Rentals dropped from $8.1 billion in 1999 to $7.8 billion last year.

"The consumer, given the choice to rent or buy, has said, 'I'll just do both,' " said Mr. Bersell.

Independents owned the business in the 1980s but the chains came on strong over the next decade, he said, and the late 1990s saw many independents close.

The top three rental chains -- Blockbuster, Hollywood Video and Movie Gallery -- collected more than half of consumer dollars spent on video rentals last year, while independent stores had 38 percent of the market, according to the association.

The chains have had their own troubles. Alabama-based Movie Gallery last year bought the Hollywood Video chain. Dallas-based Blockbuster's company-operated store base has dropped by more than 200 in the past year as the company worked to clean up its real estate portfolio. Both companies reported a drop in sales at established stores in the first quarter.

Blockbuster also reported its online subscriber base had grown to 1.3 million and is projecting it could grow to 2 million by the end of the year. Online movie rental company Netflix Inc. claims to have 4.9 million subscribers.

A company spokesman last week did not elaborate on the problems at the Pittsburgh-area Blockbuster franchise beyond saying officials had been working with Video Rentals before it filed for Chapter 7 bankruptcy liquidation. The move did not affect another 20 corporate stores in the region.

Independents that have survived say they've done everything from developing specialties and offering special services to setting up second businesses to bring in additional income.

"It hasn't been easy," said Michael Freeman, owner of 21-year-old Entertainment Tonight in Mt. Lebanon. A decade ago, he began offering framing services. He's also hung onto his stock to the point that he now has around 20,000 titles, compared with the industry average of 7,000 to 8,000 per store.

Slowing demand at Classic Video is forcing Ms. Kelley to seek out a second job. She plans to cut back her hours so the 22-year-old Shadyside store is open late afternoons, early evenings and weekends when most customers actually come in.

But Ms. Kelley, who takes pride in her collection of foreign films, classics and silent films, is determined not to close. "It is," she said, "being reduced from a business to a hobby."