Disney doubles markets for disposable DVD test
7-Eleven, Papa John's to support EZ-D with ads, in-store displays.
By Paul Sweeting -- Video Business, 3/11/2004
MARCH 11 | Eight months after introducing the industry's first batch of disposable DVDs in four cities, Buena Vista Home Entertainment is expanding its EZ-D test to Florida and three additional cities with a more sharply defined distribution strategy and significant new support from convenience chain 7-Eleven and pizza chain Papa John's.
Beginning in April, Disney will introduce the limited-play discs in Phoenix, San Antonio, Denver and throughout Florida. The discs are currently being sold in Kansas City, Mo., Charleston, S.C., Austin, Texas, and Bloomington/Peoria, Ill.
The four new test markets were chosen as strongholds of convenience store chain 7-Eleven and Papa John's pizza, both of which are making significant commitments to the program.
The two chains will place Disney EZ-Ds in all of their outlets in the new markets. In total, the studio expects to add about 1,500 storefronts across the new markets, bringing the total number of retail locations selling the discs to 1,900.
In addition, Papa John's will begin promoting its pizza-and-a-movie offer through television ads in the four markets, while 7-Eleven will devote a "substantial amount" of in-store display space and specially designed point-of-purchase promotional materials to the test, Disney officials said.
Although the studio said it will continue to support any retailer who wants to be involved in the test, results from the first four cities suggest that convenience stores and pizza delivery outlets are the most promising distribution channels for the discs.
"Convenience is what this product is all about, and obviously those two channels are built around convenience," said Lori MacPherson, VP of marketing for Buena Vista.
In another twist, the studio is lowering the list price of the discs from $6.99 to $5.99.
"The increased volume of discs required for the new markets has resulted in more favorable economies of scale that allow us to lower the price," said Alan Blaustein, CEO of Flexplay, which markets the technology underlying the self-destructing discs.
The Flexplay system relies on a special chemical process to render the discs unreadable after a fixed period of time. The process begins as soon as the discs are removed from their vacuum-sealed packaging and exposed to air.
In the case of Disney's EZ-Ds, the play window is set at 48 hours. The studio hopes the discs will appeal to movie renters who don't want to be faced with returning discs to the store or facing late fees.
"The more focused distribution will allow us to forecast demand better and more tightly control the manufacturing process," Blaustein said. "That's one reason we get better economies."
Disney is adding four new titles to the mix in April to help kick off the expanded test, bringing the total number of titles available to 45.
The new titles are Cold Creek, Duplex, The Rookie and Veronica Guerin.
Demand for the EZ-D discs is "consistent with other distribution models," MacPherson said. "It's broad appeal movies that do the bulk of the business."
MacPherson declined to disclose sales figures for any of the titles released so far.
Although the studio has not provided a timetable for a national rollout of its EZ-D line, MacPherson said Disney expects to be ready to evaluate the test again in three to four months.
"We learned a lot from the first phase of the test and we expect to learn a lot more from this phase. Whatever we do will be based on what we learn," she said.
There were initial concerns when the test was announced from environmental groups concerned about the impact on the environment of millions of disposable plastic discs. But Disney already had a recycling program in place as they launched the initial test through GreenDisk, an electronic waste recycling company, along with local environmental organizations.
Those efforts are being expanded for the next phase of the test, MacPherson said, with the help of 7-Eleven and Papa John's.
Papa John's will offer customers a $1 discount on a pizza if they return an EZ-D disc for recycling.
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