LAS VEGAS -- In a radical break with current video pricing practices, Hemdale Home Video will set the suggested retail of all future releases at $19.95 or below, said Eric Parkinson, president. Beginning on Sept. 13 with the release of "Savage Land," all Hemdale titles will carry the lower prices whether they are intended for the rental or sell-through markets, Parkinson told a luncheon during the Video Software Dealers Association convention here July 25. Hemdale has a total of six titles in its pipeline right now and all will be released with the new lower pricing, he said. Most movies aimed at the ren-
tal market cost retailers $60 to $70, and their retails would be $90 to $100. Full-length features for the sell-through market usually carry suggested retails of $19 to $25. "This levels the playing field between the mass merchants and the grocery and the rental stores," Parkinson told SN after his presentation. "If a title is going to be released to the rental market, it should be released with the philosophy that the rental is a preview for the consumer" who might like the movie and then purchase it. This will benefit retailers who carry the products for both rental and sell-through, he said. "These are movies that otherwise would be sentenced to the obscurity of the back shelf as a rental title. But now they will be something that kids will want to buy and own. The price is right and everybody can make a profit," said Parkinson. "For Hemdale, it's a gamble," he said. "The titles that we've announced represent $30 million in production investment. If the retailers don't support this, we could stand to lose a lot of money. But if the retailers do support this, it could revolutionize the way people buy movies." In addition to "Savage Land," Hemdale also plans to release "Across the Moon," "Mosquito," "The Littlest Viking," "Outlaws" and "Grizzly Mountain" with suggested retails under $20, said Parkinson. Specific release dates and prices have not yet been announced on these titles. "Incrementally, we have to sell five times as many cassettes" for the new program to succeed, he said. "In reality, we've sold more than 10 times the number as we thought we were going to in our two tests." In the past year, Hemdale has tested "The Magic Voyage," an animated feature, and "The Polar Bear King," a family movie, at $19.95. "The Magic Voyage" has sold one million units and "The Polar Bear King" has sold 500,000 units, said Parkinson. Both were accompanied by heavy marketing campaigns. "That proved that if we supported the titles with advertising, the retailers would support them with inventory, and the advertising pulled the inventory through," he said. Hemdale's new titles also will be heavily supported. For example, the PG-rated western "Savage Land" will be backed by a $1.5 million post-street date campaign that will include national television, print advertising and promotional links to General Mills and the Boys & Girls Clubs of America. The "Savage Land" ads will call attention to the fact that the title can be either rented or purchased. "When studios release sell-through titles, they pretend as though there is no rental market. But we are saying, 'Rent it and, if you like it, then you can buy it,' and then we will see how the market responds," he said. Retailers can bring in more copies of the low-priced titles and see a quicker return on their investment, Parkinson said. "It would not do you any good to have 15 copies of a movie that the studio did not advertise because there would be no consumer demand to rent," he said. "If the consumer likes it -- if the kids like it -- and if the tape is priced aggressively enough that the retailer has a few in stock for sell-through, the consumers will come back and buy right away, in most cases, before the invoice from the wholesale supplier is even due," said Parkinson. "The philosophy of the other studios has been to milk every dollar they could out of the video retailer by charging as much as they possibly could get away with for rental titles, especially the bigger rental titles. But our philosophy is, a strong retail community makes for a strong industry," he said.
