WEST HOLLYWOOD, Calif. -- The proposed in-home delivery of movies through video-on-demand systems will have little effect on the burgeoning sell-through business.
While on-demand systems will eventually hurt the rental business, especially top hits, they could boost sell-through revenues, said panelists at Hollywood 2000, a conference held here Dec. 13 and 14 by Advanstar Associates, Carmel Valley, Calif. The program addressed the future of video, video-on-demand and multimedia.
"I'm a great believer in the shrink-wrap business," said Bill Mechanic, president of 20th Century Fox, Beverly Hills, Calif. "I don't think technology will take that away."
Until recently, Mechanic was president of international theatrical and worldwide video at Walt Disney Co., Burbank, Calif. He is widely regarded as one of the driving forces behind that company's success in the sell-through business.
"Sell-through is one piece of product that will have protected windows because the upside is just too great," he said. It is unlikely that in-home delivery systems will ever match the revenues to the studios of a strong sell-through title, he said.
"So, for the hit business, I see sell-through continuing to grow and spreading to more pictures," said Mechanic.
"Assuming that the systems will be protected against copying, I see all of these things bringing more growth to the sell-through business," said Don Rosenberg, who is executive vice president of the Video Software Dealers Association, Los Angeles.
"It amazes me to see what people collect" despite extremely low usage, said Rosenberg. He attributed this to consumers' pride of ownership in their video libraries, he said.
When customers of new delivery technologies see charges for often-watched children's titles come up repeatedly on their bills, they will quickly be reminded of the benefits of video ownership, he said.
"I see all of this as a big plus to the sell-through video business," he said.
"Purchasing a video will continue to be the most cost-effective means of enjoying the product at home," said Marc Schwartz, vice president of marketing at Handleman Co., Troy, Mich. Handleman is the country's largest rack jobber of entertainment software products.
"I don't see [video-on-demand] as that much of a threat to our business. "There is very little overlap between consumers who will access video-on-demand and those who really want to own product," he said.