Summer has traditionally been the weakest period for video sell-through. But responding to consumer demand for year-round video sales, the studios are gearing up for the warm weather months with more and better product releases.
Studios are increasingly making repriced, repromoted and direct-to-sell-through titles -- usually associated with the fourth quarter -- available as early as June, July and August. Coming at a time when the video category is seeing a resurgence, this is generally good news for supermarkets.
"This year it seems like people are wanting to buy videos again," said Rick Ang, buyer at Video Mart, Sacramento, Calif., which racks video departments in 17 Bel Air supermarkets in the Sacramento area. "The trend seems to be picking up again. The releases we had in the first quarter did well for us."
But Ang is keeping an eye on the proliferation of titles. "A lot of sell-through titles all at once will cause problems with shelf space and cannibalize each other's sales. But overall, a good selection of sell-through titles is good for us and good for the industry. It also has a big effect on our rental revenues," said Ang.
The major sell-through titles represent promotional opportunities for rental, retailers said. "The movies that go direct to sell-through like 'As Good as It Gets' and 'Spice World' enable us to put a lot of copies for rental out on our shelf," said Matthew Feinstein, vice president of Marbles Entertainment, Los Angeles, which operates leased-space video departments in eight Vons and 12 Lucky supermarkets.
Marbles brings in large quantities of these titles. "Because of the low price, we're able to guarantee that the title will be available for rental. After a couple of weeks, we sell them off for $9.99. It's great for us because we're able to satisfy the initial rental demand and the demand for sell-through copies very soon after the rental street date," said Feinstein.
The previously viewed program in Marbles' supermarket departments gives the retailer an advantage over the mass merchants, especially on rental-priced products. "For instance, we're offering our customers a title like 'Addicted to Love' or 'G.I. Jane' at a sell-through price a lot sooner than they could purchase it from Target or Wal-Mart. You can purchase a used copy of 'G.I. Jane' in our stores right now for $14.99. We've got plenty," he said.
The other side of the coin is, Marbles doesn't buy these titles when they are made available as repriced or repromoted. "If you purchase the title when it's repriced, the Targets, Wal-Marts and Best Buys will be selling it at cost. We can't beat that," said Feinstein.
K-VA-T Food Stores, Grundy, Va., does the same thing. "If it's a re-release or a repromotion, I don't bring it in," said Brenda Vanover, director of video operations. "We bring in the titles when they first come out at rental and then sell off copies as demand drops," she said.
"I truly believe that when they bring out a lot of titles at once, many of them get lost. When you've got two or three coming out at the same time, it's harder to make customers aware of everything," she said. Because of the shelf space involved, "you have to be cautious about what you buy."
The combination of low margins and shrink is causing some retailers to bring in fewer sell-through products, said Randy Weddington, video specialist at Harps Food Stores, Springdale, Ark. Theft has forced him to re-evaluate his chain's commitment to sell-through video.
"Margins are so low that if you order a 24-piece shipper and one piece walks out the door, there goes your profit," he said. In most Harps stores Weddington has reduced his sell-through business to only the products customers preorder. Surprisingly, though, customers seem willing to pre-purchase tapes. In stores where he has aggressive video managers, Harps' sell-through numbers have actually gone up, he said.
"I talked to one manager who has gone through 36 pieces of 'Flubber,' which is more than I would have ordered for that store anyway," said Weddington.
Shrink also has caused K-VA-T to rethink its approach to sell-through and, as a result, cross merchandising opportunities are more limited, said Vanover. "We no longer place videos in other parts of the store because of shrinkage, so it's a little harder to tie in. But when a good opportunity comes along, like the upcoming cross promotion with 'Home Alone 3' and Sunkist, we will promote the deal within the video department," she said.
On the studio side, the number of strong summer offerings is unprecedented.
Buena Vista Home Entertainment, Burbank, Calif., will release more than 50 sell-through titles between now and the end of 1998, including repriced, repromoted animated classics and direct-to-video products, said Mitch Koch, general manager for North America at Buena Vista. About half of those will street before Sept. 1.
Koch is confident that the high volume of products that Buena Vista and other studios are unleashing will not flood the marketplace. "We believe the market expands with good product. Good product is good for the industry; it's good for everyone," he said.
Buena Vista has announced its slate of sell-through releases through the end of the year, the only studio to do so. It has chosen the summer months to release "Black Cauldron," an animated Walt Disney classic from 1985 that has not been available on video before. It will street Aug. 4. Also coming this summer from Buena Vista is the direct-to-video sequel, "Pocahontas: Journey to a New World." The Aug. 25 release will include, among other promotions, an Energizer battery rebate.
Buena Vista will release the Imax movie "Titanica" July 28 in an attempt to capitalize on the public's seemingly inexhaustible fascination with the sunken ship. This also represents an experiment in the viability of releasing Imax movies on home video. Additionally, Buena Vista will release a Halloween promotion Aug. 25. It will include both new and old titles and a group of repriced studio films, including "G.I. Jane" and "Marvin's Room."
With more strong titles coming out in August and continuing to sell into the fall, the summer sales season is starting to blend into the fourth quarter, said retailers. "Last year, 'Winnie the Pooh's Grand Adventure' came out in August and it was the third highest selling video of the year for us," said Ang.
"Obviously, summer releases don't sell as well as those in the fourth quarter. But we did end up reordering 'Pooh' to cover the fourth quarter. Because of the titles that Disney is releasing like 'Black Cauldron,' 'The Rescuers' and 'Lady and the Tramp,' I see it all blending into the fourth quarter," he said.
Columbia TriStar Home Video, Culver City, Calif., will release "Spice World," the feature film debut of the popular British singing group, June 16. Like Buena Vista, Columbia TriStar will experiment with Imax on video, releasing "Across the Sea of Time," "Wings of Courage" and "Thrill Ride" June 9. Additionally, Columbia will release another group of its classic television series, including episodes of "All in the Family," "The Partridge Family," "Bewitched" and "I Dream of Jeannie."
Twentieth Century Fox Home Entertainment, Beverly Hills, Calif., will release "Home Alone 3" June 2. Cross promotions with this title are planned with Sunkist Premium Juices, Motorola Pager and Mega Blocks.
"Promotions like the one for Sunkist and 'Home Alone 3' are helpful because they are specific to supermarkets," said a video department manager who asked not to be identified. "It makes the title stand out. I take that kind of promotion into account when I'm ordering."
However, the video manager has not had good luck with television products, even low-cost products. "I can sell almost anything at $9.95 except stuff that's been on TV," said the manager.
Fox also will release episodes from the "Teenage Mutant Ninja Turtles" television program, from the "Lost in Space" TV series, championship videos from the National Basketball Association and National Hockey League, the popular PBS series "All Creatures Great and Small" and wide-screen editions of "Romeo and Juliet," "Predator" and "Courage Under Fire."
Paramount Home Video, Hollywood, will follow its successful 20th anniversary theatrical run of "Grease" with a video release. Priced at $14.95 for the wide-screen and pan and scan editions, and at $19.95 for the collector's edition including a compact disc and a booklet with original script and lyrics. Paramount has also chosen this summer to release the high-rated preschool show, "Blues Clues," on home video.
Also mining the nostalgia craze this summer will be Universal Studios Home Video, Universal City, Calif., which will release an anniversary edition of the Academy Award-winning "American Graffiti." Two animated films currently on moratorium will also become available again: "An American Tale" and "An American Tale: Fievel Goes West."
Warner Home Video, Burbank, Calif., plans a busy summer with sell-through products expected from all its divisions. PBS Home Video will release "In the Wild: Orangutans," with Julia Roberts July 7. Turner Original Productions will release "Assassinated: The Last Days of King and Kennedy" Aug. 4.
Warner Bros. Family Entertainment's slate of summer products includes "Dennis the Menace Strikes Again" July 14, "Louisa May Alcott's Little Men" July 28 and the "Batman/Superman Movie" Aug. 18. Additional Warner products coming in early summer will be a feature-length animated musical, "The Mighty Kong," due out June 16, and cartoons based on "Zorro," streeting June 30. Also coming from Warner June 2 will be a special edition of "Contact," including extra footage and a making-of documentary, and a 25th Anniversary edition of "The Exorcist" Aug. 25.
PBS Home Video will release "In the Wild: Orangutans," with Julia Roberts, July 7. Turner Original Productions will release "Assassinated: The Last Days of King and Kennedy" Aug. 4.
