DALLAS -- Supercomm is about to roll out CD-ROM products to supermarket retailers on a shared-revenue, pay-per-rental basis.
Supercomm, which primarily targets supermarkets, is the first of the pay-per-rental companies to distribute compact disc-read only memory products. Five-inch compact disc-based technologies like CD-ROM are at the forefront of the move to interactive multimedia that combine text, music and video.
Supercomm's arrangement is with Compton's NewMedia, Carlsbad, Calif., which is one of the leading players in the emerging CD-ROM market.
"We believe that CD-ROM represents the new frontier of entertainment technology and that in years to come it will become a very significant part of the rental business," said Des Walsh, vice president of Supercomm.
The company plans to begin the program in 50 stores of 10 different chains within 60 to 90 days, concentrating on those in affluent metropolitan markets, said Walsh. After six months the company will fine-tune the program and extend it to other retailers, he said.
Supercomm now has about 800 stores on-line; more than 90% are supermarkets. Among the companies known to be using the system are Pathmark, Safeway, Winn-Dixie, King Soopers, Fleming, Price Chopper, Dillon's, Fiesta Mart and Nash Finch.
Details on the sales agreement between Compton's and Supercomm were firmed up last month after a lengthy delay. The program was first announced last summer during the Video Software Dealers Association convention in Las Vegas, but was slowed by Compton's acquisition by Tribune Co., Chicago, and then a controversy over a patent for its CD-ROM search technology awarded to the company last fall, said Walsh.
"There were a lot of other priorities on both sides," he said.
Industry observers said the Supercomm-Compton's deal is significant for three reasons: · It confirms that CD-ROM companies are receptive to letting their products be rented, something that had been in question.
· It positions supermarkets to take a lead role in the distribution of interactive multimedia. · It will allow retailers to try this new technology with little risk, while the increased availability of the products will enable the technology to grow faster.
"Up to now, many supermarket operators have been wary of entering the CD-ROM business because of the significant investment involved. The availability of CD-ROM on a pay-per-rental basis means that they can get into the CD-ROM business for as little as $98 per store," said Walsh.
"Revenue sharing is ideal for the new technologies because it effectively shifts the risk and inventory cost from the retailer to the software developer or manufacturer. Removing that risk will enable more retailers to get involved, and that in turn will help to grow the technology and expand the business," he said.
The program will involve a selection of Compton's 12 most popular titles, said Walsh. These will include: "Compton's Interactive Encyclopedia," "Lifestyles of the Rich and Famous Cookbook," "The Sporting News Pro Football Guide," "USA Wars: Civil War," "The Mega Movie Guide," "The Doctor's Book of Home Remedies," "Kathy Smith's Fat Burning System" and "Berenstain Bears Learning at Home."