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THE MORNING BUZZ: USA Home Entertainment Dissolves: One Less Voice in the Marketplace

14 Mar, 2002 By: Kurt Indvik

The news this week that Universal Studios Home Video will begin taking over distribution of USA Films home video releases and that USA Home Entertainment will be dissolved, leading to the layoff of some 20 people, was not unexpected. Since the announcement that Vivendi Universal acquired USA Networks' entertainment assets, such a merger seemed a foregone conclusion.

But I must say I kept hoping against hope the little supplier would survive, even as I regularly pressed Joe Amodei, president of USA Home Entertainment, for a signal as to his division's own fate, and he graciously and good-naturedly declined to comment each time.

The reason I say so is that I always wonder about the true impact on any entertainment industry (TV, movies, book publishing) when consolidation leads to one more small, independent provider becoming the proverbial newest notch on a media behemoth's belt. I understand that the Vivendi Universal purchase of USA's entertainment holdings for $10 billion is no small transaction and that USA Films and other properties will continue to have their brands intact. But as far as home video, there will no longer be a focused team promoting and developing USA home video product, (or at least, one would expect, not to the extent it currently enjoys).

Outside of the home video industry, the move will likely not be noticed. The brand of USA Home Entertainment would not register with most consumers. However, I would speculate that consumers and, of course, retailers will feel the result of this consolidation. I wonder how much bandwidth and focus Universal Studios Home Video has to spare not only on USA Films, but on its sports product and other special interest fare, on the limited theatrical genre/direct-to-video films it was acquiring. The NFL, NHL and NBA deals are certainly worth focusing on, but so are such diverse fare as the dance videos featuring Savion Glover, or unique items like Happy Holidays From Bing & Frank, a color reappearance of a 1957 TV special that is planned. Not to mention a host of genre films in acquisition.

As a purely practical matter the thought that, perhaps, we will not see the level of sales promotion of product that would have come out of USA Home Entertainment—not to mention maybe less product altogether—means that video stores and consumers will have that much less to retail and to rent between the hits, so to speak. It's this product that keeps the rental business going. The concern here is that any media consolidation of smaller providers into larger ones just means one less player to push new ideas and programming, one less source of energy for the industry.

I have no business case studies to support this concern. And I don't disagree that this particular consolidation may, in fact, be the right thing to do. I always, however, lament the loss of another voice in the marketplace.

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