With multiple hits already announced for the first quarter, the beginning of 1998 is shaping up to be a strong period for sell-through video, and a definite improvement over 1997.
"I expect some good strong business trends again," said Clifford Feiock, video coordinator, Nash Finch Co., Minneapolis. "Business has been so stale in 1997. I am very hopeful, based on the line up as it appears now, that we will be able to build sales and get some of that business back, not only for our stores, but in the entire industry," he said.
"Next year is going to be much better than 1997 for feature sell-through," said Bill Bryant, vice president of sales, grocery and drug for Ingram Entertainment, La Vergne, Tenn. "We are seeing a preliminary line up that has a major feature sell-through title almost each month, as opposed to 1997 when there were several months at a time without a strong feature sell-through title."
Compared to past years, when a handful of major titles made their way to video sell-through in the first three months, next year's line-up is substantial.
For example, in January there will be the modest hit "Buddy," from Columbia TriStar Home Video, Culver City, Calif.; "Leave It To Beaver" and "Kull The Conqueror" from Universal Studios Home Video, Universal City, Calif.; and the direct-to-video "Hercules & Xena: The Animated Movie," which Universal is backing with an all-out marketing campaign.
February will see three prominent titles: the huge theatrical hit "Air Force One" from Columbia TriStar; Disney's key animated feature in 1997, "Hercules," from Buena Vista Home Entertainment; and another "Beauty and the Beast" direct-to-video title from Buena Vista, "Belle's Magical World."
A re-release of Disney's "Peter Pan" from Buena Vista is on the schedule for March and more product announcements are expected. Among the titles that retailers might see at sell-through pricing in the early part of 1998: "Fern Gully 2," "Soul Food" and "Anastasia" from Twentieth Century Fox Home Entertainment, Beverly Hills, Calif.; the re-release of "The Little Mermaid" and the new "Flubber" remake of the "Absent Minded Professor," from Disney and Buena Vista; and "Bean" from PolyGram Video, New York. And, as studios continue to shorten the window between theatrical and video, there may be other surprises based on box-office success late in 1997.
Meanwhile, studios are stepping up the marketing campaigns behind top titles repriced from the rental market, as well as for catalog collections. A re-issue of "Close Encounters of the Third Kind" is in the works at Columbia TriStar. Shippers of the 75th Anniversary catalog program from Warner Home Video, Burbank, Calif., are likely to find a place alongside many of the new releases in supermarkets in early 1998.
Additionally, retailers will continue to do business with sell-through titles released in December 1997, such as "The Land Before Time V" from Universal; "Air Bud" and "George of the Jungle" from Disney and Buena Vista; and "My Best Friend's Wedding" from Columbia TriStar.
"I don't look for anything but plus business" from the big slate of releases, said Jim Fox, nonfood manager for Buehler Food Markets, Wooster, Ohio. "Sell-throughs are just tremendous in this area," he said.
Both rentals and sell-through lagged behind expectations in 1997, the retailers said. "It's coming none too soon. We certainly need a stronger line-up than we've had in the last couple of months. October and November have been just terrible," said Feiock of Nash Finch.
In November, Feiock didn't even spend as much as he had in previous years. "There just wasn't the selection to buy from. We were able to buy the lower-priced titles in great quantities, but it still didn't add up to what we spent last November.
"So we certainly need some good strong titles again, and not just in sell-through, but in a broader array of titles that will strengthen the entire industry. I hope the first quarter will be positive for us," he said.
"I'm hoping that we will have high profits and that the titles coming out will put us back to where everybody needs to be," said Brenda Vanover, video coordinator/merchandiser at K-VA-T Food Stores, Grundy, Va.
"Like everyone else, I'm looking forward to it, because the whole industry has been down this year," said Matthew Bethel, video coordinator for Seaway Food Town, Maumee, Ohio. "So, hopefully, the first quarter will help out."
Although the focus of Reasor's Foods, Tahlequah, Okla., is primarily on rental, the retailer will merchandise key titles on shippers and special two-tiered tables in its video departments, said Dennis Maxwell, director of video. "We will carry every sell-through item when it comes out, and until that demand is gone. After that, we will start to thin it out. By that time, our previously viewed [titles] are coming off the rental shelves, and that's what we are going to push. We don't have the floor space to adequately do rental and sell-through, so we are going to stick with the rental," he said.
The number of sell-through titles released after Thanksgiving is up dramatically over 1996, noted Matthew Feinstein, vice president at Marbles Entertainment, Los Angeles, which operates leased-space video departments in 22 California supermarkets of Lucky Stores, a subsidiary of American Stores Co., Salt Lake City; and Vons Cos., Arcadia, Calif. This serves to drive traffic into supermarket departments, he said.
"With more sell-through titles and all the extra advertising, the studios bring about a heightened awareness of the video business. That helps supermarket video departments become magnets for customers," said Feinstein. Once the customers are there, they pick up other sell-through titles and rentals, he said.
However, analyst Tom Adams, president of Adams Media Research, Carmel Valley, Calif., cautioned that after several years of rapid growth, the sell-through market may be maturing. The number of videos bought per household stayed level at seven from 1996 to 1997, he noted. "So I think we are reaching a short-term pause in the growth curve of how many tapes per household people want to own," he said.
"There is a natural maturation cycle and we are reaching that point," said Adams.
One advantage of having big sell-through titles come out early in the first quarter is a greater flexibility in merchandising at the store level, retailers told SN.
"If we are going to do anything really big in the way of special displays, the first quarter is a little bit lighter than the fourth quarter, when there is so much congestion," said Buehler's Fox. Cross merchandising is more feasible at that time, he noted.
"In the fourth quarter, it seems like the titles are grouped so tightly together, and we know the fourth-quarter business is going to be extremely strong. But the limiting factor is the amount of display space," said Nash Finch's Feiock.
"From a merchandising standpoint, the first quarter should lend itself more to displays and product tie-ins because we will have more space available and will be able to be more creative with it," he said.
"Certainly there are more floor space opportunities and also advertising opportunities for the supermarkets when releases are more spread out," said Ingram's Bryant. "When a strong feature sell-through title exists in any month, it drives ancillary sales. The secondary titles -- and catalog video, for that matter -- sell better, because there is a driver that brings people into the video area of the store to make the purchase. So there is an incremental pick-up at retail as well," he said.
