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THE MORNING BUZZ: The Distribution Pipeline Continues to Be Squeezed: Do Retailers Care?

29 Apr, 2002 By: Stephanie Prange

Since reporting Columbia TriStar Home Entertainment's decision this month to streamline distribution to Ingram and VPD by the end of the summer, we've heard precious little outrage.

In last week's story, a few retailers voiced opposition to the move, noting it may make it more difficult to quickly reorder surprise hits and that it severs long-term relationships with other distributors.

Still, compared to other industry topics, such as street date violations, we've heard nary a peep.

It could be retailers are so used to these kinds of studio-imposed contractions that they are resigned to it. But I'm beginning to wonder if retailers really care.

In a Video Store Magazine survey of 200 independent retailers conducted last June (Video Store Magazine, July 22-28), the majority of retailers (71 percent) reported they felt distributor customer service had not suffered. At the time, distribution had been hit with two major blows: Warner Home Video had gone rental direct, with fulfillment through Ingram (September 2000); and Universal Studios Home Video had streamlined distribution through Ingram and VPD for rental product, plus Valley Media for sellthrough (October 2000). Still, 74 percent of retailers in that June survey ranked their distributor's customer service as an eight or higher on a scale of one to 10, and only 34 percent reported that buying product was more difficult than a year ago. Twenty-two percent said it was easier and 45 percent felt things were about the same. At the time, the distributor most respondents reported using was Ingram (41 percent). Second was VPD (25 percent).

In the survey, one-fourth of respondents said their distributor had changed in the last year; yet they didn't seem to care much based on their responses. I know if I were forced to change even my favorite ice cream (Haagen Dazs) I'd put up more of a fuss.

Perhaps now that Columbia TriStar had further squeezed the pipeline, retailers will begin to feel the pinch, too. I'd be curious to hear from our readers.

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