The one-story, blue-colored video-rental store on upper Georgia Avenue NW has a large one-month-old banner that proclaims, "With your help we shall overcome."

Two doors away, a competing video store has a smaller sign that says, "Now open."

The signs signal that the war for customers in the burgeoning video market has a new battleground -- the District.

The war was touched off earlier this month when Erol's, the nation's largest privately owned video cassette rental business with 63 stores from Norfolk to Philadelphia, finally opened two stores in the District.

One of the new stores was practically on top of Video Channel, a small video chain operating solely in the city. The second Erol's opened in Hechinger Mall in Northeast.

The banner went up at the Video Channel store at 6450 Georgia Ave. NW around Thanksgiving, three weeks before Erol's opened its store, according to branch manager Frank Asbury.

"We cultivated the market here in Washington, and we feel they Erol's are trying to put us out of business," said Asbury, as he leaned against a glass counter in his compact store, a former gas station. "We are a black business and we make that known. We are asking for our customers' support with that sign and we are getting it."

George Geran, manager of the new Erol's store at 6438 Georgia Ave., said, "We don't want anyone to feel we are trying to take away anyone's business.

"We have a lot of respect for a business which is up and running," said Geran, standing in the middle of the red-carpeted, spacious store, formerly occupied by a fast-food restaurant. "We are not here so much to get new customers as to service the 3,000 customers we already have in this neighborhood who had been using our Silver Spring store."

In the suburbs, Erol's has had a tendency to locate new stores very close to -- if not in the same shopping mall as -- existing, small video-rental shops, according to some of its rivals.

Erol Onaran, a Turkish immigrant who, in 25 years, has built his television sales business, has said that he was once a small businessman and that it is not his intention to drive small competitors out of business.

"I'm sorry to hear" that complaint, he has said in the past. "But I didn't go to those locations on purpose. I didn't go there to put them out of business. But I'm a businessman -- if my people say it is a good location to be in, we take the place. We can't be successful if we say, 'Well, there's another guy here so we can't move here,' " he added.

Both Erol's and Video Channel say the majority of their rentals are adventure films.

Video Channel offers a lower membership fee, $15 per year or $30 for life, compared with Erol's, which charges $25 per year or $69 for life.

But Erol's offers first- and second-day rentals for $1 less than does Video Channel.

There may well be room for both video stores in that neighborhood and for more throughout the city, said Dick Kerin, vice president of video for Erol's.

"Our figures show that nationally there is a 31 percent penetration of VCRs, and in the Washington area, 36 percent," he said. "That says to us that this is a growing market here."

Kerin said video stores in the same neighborhood complement each other because they don't all offer the same mechandise. He noted that Video Channel rents adult movies and sells VCRs. Erol's offers neither in its Washington stores.

And Kerin also said that with Erol's 3,000 customers coming to the Georgia Avenue store, " . . . all the stores in the area will benefit."

He added, "It took us two years to find the Georgia Avenue place because we need 12- to 15 thousand square feet and a large parking area. However, we may get more daring and try some inner city locations without parking because a lot of people are used to dealing with a lack of parking in the city."

Ray Mott, the owner of Video Channel, which has four outlets in the city, said that he is also looking for new locations in the city and plans to hold onto the title of the biggest video business in Washington. Mott, an experienced businessman who previously owned a very successful computer company, said he is more concerned about four small video stores in the neighborhood than about his own store. He said he believes that the market is saturated with video stores and that the smaller shops will not survive the competition brought on by the battle between Video Channel and Erol's.

"Here's what bothers me about Erol's coming into our block," he said. "If they were interested in making a positive impact on the neighborhood, they would have talked to all of us and maybe bought out the smaller businesses."

Mott is fond of saying that he opens his stores within the residential communities and that he makes them part of the community by hiring District residents and offering children's movies and musicals for rent at two for the price of one.

Speaking about his own chain, which also has stores in Adams-Morgan, Northeast and Southwest, Mott said, "I recognized early on there was a market in the black sections of town for a video store and I filled that need," he said. "We installed the base. We have taken the risks and we have educated the consumer.

"We sweated blood to open a business," he continued. "And then they come in with a huge advertising budget. We cannot even try to match their advertising. They are like a large elephant sitting next to us. What happens if it rolls over?"