Direct-to-video is big business, particularly for supermarkets.For retailers with ongoing sell-through programs the steady supply of titles has become a vital revenue component. And for rental markets DTV has gained respectability as a category no longer dominated by substandard product."Going direct to video has become such a big trend in the industry that we do pick up a lot of those titles," said

Direct-to-video is big business, particularly for supermarkets.

For retailers with ongoing sell-through programs the steady supply of titles has become a vital revenue component. And for rental markets DTV has gained respectability as a category no longer dominated by substandard product.

"Going direct to video has become such a big trend in the industry that we do pick up a lot of those titles," said Craig Hill, video specialist at Harps Food Stores, Springdale, Ark.

The production values of DTV projects have increased so much that there is no longer a clear distinction between these and theatrical entries. Disney's "Toy Story 2," one of the biggest theatrical successes of the past year, was at first intended for the DTV market.

The wide-ranging category's showiest titles, and the ones increasing most dramatically, are those made for home video. These are often family films with familiar characters. "Next-generation sequels to theatrical features work very well for us," said Bill Glaseman, video specialist for Bashas' Markets, Chandler, Ariz.

In sell-through the lion's share of the video sequel market has gone to Buena Vista Home Entertainment, Burbank, Calif., which continues to deliver high-profile product. Its Aug. 8 release of "Buzz Lightyear of Star Command" will be followed Sept.19 by "The Little Mermaid II: Return to the Sea."

"Considering Disney's marketing ability, both Buzz and Mermaid should do great business," said Kirk Kirkpatrick, vice president of marketing for WaxWorks/VideoWorks, Owensboro, Ky.

"'Little Mermaid II' will do well for us," said Hill.

"We think 'Little Mermaid II' will be strong, so we're picking it up," said Brenda Vanover, director of video operations at K-VA-T Food Stores, Abingdon, Va.

Other specialists' opinions differ, however. "We're not as sold on 'Little Mermaid II' because it's a sequel to an older title," said Greg Rediske, president of Video Management Co., Tacoma, Wash. "There may not be the demand for it, and it's overpriced at $26.99."

What guidelines do retailers use in ordering? "Our direct-to-video purchases depend on a number of factors," said Rediske. "We usually don't buy them as heavily as theatrical releases. But if it's a huge franchise, like Aladdin or Buzz Lightyear, we feel better about it."

"We much prefer strong theatrical releases to direct-to-video titles," said Glaseman.

"DTV doesn't have the theatrical recognition, but at least we get it first," said Hill of Harps.

Being first isn't as important as it once was, however, because of new video synergies. In recognition of this the term "direct-to-video" no longer refers exclusively to the VHS/DVD markets. Now it encompasses material premiering on any video delivery system, mainly broadcast and cable TV at present, with bigger roles for pay-per-view, video-on-demand, and Internet streaming on the horizon. The debut medium has become less consequential and "DTV" has become synonymous with "non-theatrical."

Studios, like retailers, have increasingly realized the value of TV promotion for video. Artisan Home Entertainment, Santa Monica, Calif., which releases telefilms and miniseries -- most recently, "Arabian Nights" -- under its Hallmark and Family Home Entertainment labels, is capitalizing on this. "The amount of exposure our films get on TV is similar to a $25 million to $30 million publicity and advertising budget," said Artisan president Steve Beeks. "So to a certain extent they can be looked on as theatrical releases in that they have that level of awareness."

One result of this realization is the shortening or elimination of TV-to-video windows. "Not long ago a TV movie or miniseries would take as long as a theatrical film to be released on video," said one analyst. "Now it's almost immediate." The Broadway production of "Peter Pan" with Cathy Rigby, for instance, from A&E Television Networks, New York, shows on network television Oct. 8, two days before its debut on VHS and DVD.

Artisan takes the next step with its "Tangerine Bear," which comes to video Nov. 1, then airs on TV. "We're going to pre-empt the Disney Sunday night movie on ABC later that month," said Beeks. "'Tangerine Bear' is a full-length animated feature based on a children's book, and it's perfect for supermarkets. The title will have a tremendous amount of awareness and a large number of cross-promotional partners, including Keebler." Trisha Yearwood performs original songs in the project, which features voice stars Jonathan Taylor Thomas, Jenna Elfman, David Hyde Pierce, Howie Mandel, Tom Bosley and Marlon Wayans.

Another Artisan title returns to a more traditional window for positioning in religious holiday markets. "We have a picture called 'The Miracle Maker,"' said Beeks, "which is the story of Jesus teaching. It's a full-length feature film done in state-of-the-art three-dimensional animation. We premiered it on ABC on Easter Sunday this year and it rated No. 1 in its time slot. There are a huge number of consumers asking for it, and it will be an incredible seller this holiday season." Ralph Fiennes provides the voice of Jesus, with a supporting cast that includes Julie Christie, William Hurt, Miranda Richardson and Richard E. Grant.

The fall rental market contains DTV entries as well, supplied in part by films intended for theaters but diverted to video. "Since the beginning," said Beeks, "pictures that have been released direct to video have been mostly B-movie, second-rate action pictures or erotic thrillers. But a lot of things have changed in the industry over the last few years. It's a much tougher theatrical market than in the past. A moderately budgeted film that doesn't warrant a gigantic publicity and advertising commitment to make it rise above the fray ends up not making it to the theatrical marketplace."

Artisan has two such films coming soon to video. In September "Slow Burn" with Minnie Driver and James Spader is scheduled. "It's a mystery-suspense film with high production values," said Beeks. Then in October comes "Picking Up the Pieces," a "smart comedy" with Woody Allen, David Schwimmer, Kiefer Sutherland, Cheech Marin, Fran Drescher and Andy Dick. It cost nearly $20 million to produce, Beeks noted.

Universal's current DTV titles, though -- July's "Beethoven 3" and August's "Dragonheart: A New Beginning" -- were developed for home video. Some specialists see this as a mixed blessing. "DTV rental titles like 'Dragonheart' and 'Beethoven' are obviously overpriced," said Rediske of Video Management. "A cost of $70 or so makes it tough to make a profit, although buying programs make the prices a little better."

Buena Vista's DTV rentals are often releases from the Disney Sunday movies on ABC-TV. "We don't buy Disney TV rental product," said one specialist for a large chain. "They have ridiculous pricing, which is grossly prejudiced against anyone who's not on revenue sharing."

One new category trend seems clearest. "The video renting audience has matured," said Beeks, "to the point where they expect to find good movies being released direct to video."