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The New Coin of the Entertainment Realm

3 Dec, 2002 By: Holly J. Wagner

Well, Black Friday is behind us and so far, retailers are reporting strong sales. On the other hand, economy watchers are saying shoppers are in mid-holiday-season mode (The Natoinal Retail Federation reported that 8.2 percent of consumers it surveyed were finished with holiday shopping by Monday and most shoppers have completed 38.7 percent of their shopping already), rather than at the starting gate, prompting some to suggest the best is behind us for this year.

DVD is in a strong position regardless, if only because of the deals available. Wal-Mart was offering selected catalog titles at two for $10 over the weekend. At that price, it doesn't pay to rent.

That's partly because DVD's durability is creating a whole new economy in used product. I'm not talking about the $9.99 “pre-viewed” (marketing spin for “thrashed”) copies from any of the rental chains. I'm talking good, old-fashioned used, as in someone else owned it, got tired of it and sold it.

This creates a parallel economy. Most stores that buy used DVD advertise it like a pawn shop: “Need some quick cash?” query the flyers at the counter and posters on the windows. “Sell us your old DVDs!”

That limits the long-range value of big titles because the studios have gravitated toward saturation marketing at street date and retailers have followed by making this week's title the loss leader. New DVD copies of Spider-Man were going for $13.88 on eBay's Half.com in the title's first week of video release.

Apparently not everyone who gets the hot new title wants to keep it. I was in a Wherehouse a couple of weeks ago and noticed a couple of things.

One big lesson is a new holiday paradigm: buy new for gifts, used for yourself.

I saw this when a customer went to the counter to trade off three used titles for a new one, a standing offer (within stated limits) at Wherehouse. The salesperson scanned the new title and offered, ever-so-helpfully, “We have this used…” The consumer chose new, explaining it was a present.

The chain has a limit of three of any title in the used bin at any given time. The shopper I observed was unable to trade off copies of Harry Potter and the Sorcerer's Stone and Hannibal because the store had already caught its three-used-copies per store limit. Which changes the DVD life cycle equation, at least for the consumer.

Now, if we really want to open a can of worms, we could ask whether studios count those resold copies in their sales figures…

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