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The DVD Shell Game

25 Oct, 2005 By: Holly J. Wagner

The other day I saw a news article about how the newspapers in the United Kingdom are trying to build sales and attract subscribers by giving away a DVD with the newspaper.

They are catalog titles, to be sure — on the same day, the Times offered the 1972 film Cabaret, the Guardian offered the BAFTA-winning Brit film East is East, and the Independent had the classic Indochine. The article pointed out that such a promotion leads to spikes in sales, as folks who didn't normally buy the paper would spend the £1.20 on the day of the offer to get a coupon redeemable at the nearest video shop for the DVD, which might sell for as much as £15 on its own.

That was right after I saw the freestanding poster by the shopping carts at my neighborhood Savon drug store offering a free copy of either Madagascar or Star Wars: Episode III — Revenge of the Sith with a threshold purchase of Nabisco products. This offer is a rerun of last year's offer (also via American Stores, through Albertson's and Shaw's markets) of a free copy of Elf or Shrek 2 with a $50 grocery purchase.

Which led me to the inevitable question: What part of "market saturation" don't you understand?

Did DreamWorks learn nothing from the hit it took first from Shrek 2 returns and then from unforgiving investors? This kind of strategy may be great for boosting ship numbers before the holidays (I can hardly wait for the Madagascar first-week "sales" press release!), but that will only delay reality.

Or perhaps that's the point? Is it all a financial shell game, so they can close out the year with a success on the books that won't come home to roost until spring, when the next theatrical picture comes out?

I doubt it. I think Hollywood's hubris has the industry in denial about the very notion of a saturation point for DVD. We've been seeing it all year. (It's the same attitude, by the way, driving the push for a new format nobody cares about.) Studios, or perhaps their media conglomerate parents, just can't seem to get that people have only so much time and space for movies.

Which brings us back to the increasing trend toward using DVDs as party favors. There is no faster route to devaluing your product than giving it away. If you follow this situation logically out to its extreme, soon you won't sell DVDs to consumers at all. You'll just sell them all to other corporate entities to give to their customers for buying enough crackers, Cheez-whiz or detergent.

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