Retailers on guard against Blu-ray theft

EMA, others aim to keep high-def software safe

By Susanne Ault -- Video Business, 1/16/2009

JAN. 16 | As Blu-ray Discs grow in popularity, the slim boxes with the premium price also are growing more popular with thieves. This is creating a new challenge for retailers, who want to keep the new format easily accessible for customers but also want to guard against shrink.

Target has begun stocking Blu-ray titles in security casings in several hundred stores, while sources said that Blu-ray titles are being locked in secure displays in at least one southern California Wal-Mart store.

“We are using extra means of protection for Blu-ray titles,” Target spokesman Joshua Thomas said. “Our asset protection team is constantly monitoring theft trends, and we want to protect our merchandising and have titles on shelves that guests are looking for.”

He adds that so far, Target is pleased with the security implementation as “these protective devices are an effective means to deter theft in our stores.”

The Entertainment Merchants Assn. is working on solutions that prevent theft and provide simple access to titles. One problem with locked “keeper” cases, which are also often used in videogames merchandising, is that they can prevent purchases with consumers who don’t want to wait for employee assistance.

Sources indicate that the Blu-ray theft rate, the percentage of titles stolen compared to total sales, could be as high as double-digits for certain retailers. This compares to a 1.5% average for standard DVD, according to EMA.

“I guess the good news is that shrink wouldn’t be so heavy if there wasn’t demand, so it means that this is a format that is in demand,” said Mark Fisher, EMA VP of strategic initiatives. “But if you look at shrink as a measure of sales with a still-growing category, it looks like the shrink is growing at a faster pace than sales.”

EMA will release its first Blu-ray theft statistics later this year, as it works on ‘Project Lazarus,’ a program exploring new security technology that will satisfy retailers but won’t necessarily curb consumer interest for Blu-ray.

“The fewer barriers that exist for the consumer to get to the product, the better off sales are going to be for the product,” said Fisher. “Consumers don’t want to have the potential aggravation to wait at check out for someone to open a keeper case.”

Also, the Blu-ray theft threat is leading certain retailers to consider lightening their orders of the product, according to sources.

“What some retailers are doing is bringing in less,” said one wholesale distribution source. “The industry needs to embrace Blu-ray, but theft is an issue. We need retailers to support it, but not at the price of having it all stolen.”

EMA is already evaluating one possible non-keeper/non-glass-wall solution, created by the company Aequitas Innovation. The technology revolves around an RFID-controlled ‘button’ that is locked to the disc inside the package. Upon being scanned at retailers’ registers, the buttons are unlocked, and only then can consumers take the disc out of the package for viewing. People should find it impossible to pry stolen discs off package hubs that use the Aequitas button system before it is unlocked.

Adding a button to a Blu-ray title should cost less than 20¢ a unit.

EMA’s Fisher hopes to have the Aequitas technology involved in late-2009 retail pilots. Aequitas is eyeing widespread retail rollout in 2010.

“This is a fairly big improvement,” said Paul Atkinson, Aequitas president and CEO. “Employee theft is a big problem, and only authorized staff will have access to the RFID scanners to unlock the button keys.”

Atkinson believes that the technology is tough but still soft enough not to scare away customers.

“This will get rid of that scotch tape on discs that drives us nuts,” he said. “We spend all this money to create attractive packaging, but then we go and wrap them in packaging designed to keep people away from them.”

He also hopes that Aequitas’ technology will encourage more paper-based environmentally friendly packaging, which makes the cases particularly vulnerable to theft because of their light, slim design.