EMBRACE THE DARK SIDE
Carl DiOrio -- Video Business, 5/27/2005
MAY 27 | A lot of video store operators must have wished they had an army of clones last week to field recent questions about Star Wars titles--not to mention more franchise inventory--now that George Lucas' latest light-saber epic is packing movie theaters.The spillover effect for home video business has been impressive.
Hordes of Jedi-wanabes have descended upon local video stores, begging to rent copies of the first two prequels or the original trilogy, only to be told all Star Wars titles were unavailable.
A Hollywood Video near our midtown offices stocked just five copies of each title and thus was cleared of all Star Wars inventory even before the new movie hit theaters, except from a few copies of the animated Clone Wars TV show. And a Westside Blockbuster was similarly bereft of Star Wars titles by opening weekend for Revenge of the Sith.
So why didn't rentailers order more copies of franchise titles prior to the Star Wars phenom touching down once again in theaters? Like many inventory decisions, it appears to come down to store space limitations.
The same store I visited ordered an impressive 150 copies of newly released DVD The Aviator. But a clerk noted that many new studio releases are ordered in quantities of only 20 or so, and even for The Aviator, likely 140 of those stocked will get sold off within a few months as previously-viewed discs.
Musing over such an ability to sell-off used inventory so quickly, I came to this $64 million question: When will the big rental chains finally give in and begin selling new DVDs?
"I've been suggesting that for some time," notes Tom Adams of Adams Media Research.
In a recent research report, Adams adds: "We have come to the conclusion that games, subscriptions and used sales … can only make a modest difference in rental store growth going forward. The real hope for putting the sector back on the growth track is tapping into the $16 billion consumers are spending on video sales."
Presented with such suggestions, rentailers tend to reply that limited space and tough competition from mass merchants makes getting into sell-through more trouble than it's worth. But, heck, if a single store can sell 140 scratched (but guaranteed to play!) copies of The Aviator, doesn't it seem likely there's some price point at which it will be feasible to find a few square feet to stock pristine copies of select titles on a regular basis?
Those legions of Star Wars fans wouldn't seem likely to haggle over price if they could just lay their hands on one of the discs at their local video store.
Rentailers treat the idea of feeding such hunger as retail heresy. But to this observer, it appears less like joining the Dark Side as an example of the old chestnut, "If you can't beat 'em, join 'em."
There just seems little reason to say sales of new DVDs must be the sole province of those willing to make it a loss leader. Sure rental chains must continue to emphasize their core operations, but supplemental income is still a good thing, right?
So to the brave and the few willing to tread this unchartered rentailer terrain, I say: May the sell-through force be with you!
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