An Online Buyers' Market that Might Help Small Retailers19 Sep, 2004 By: Kurt Indvik
At this week's Home Entertainment Retail Expo in Baltimore, yet another new online venture will be introduced. But for a change, this is one that could help, not threaten, the smaller home entertainment retailer.
The indieBuyer.net concept (and it's just a concept at this point, since a beta site is not expected until later this fall) has promise, at least on paper. As you can read in this week's issue, this is, essentially, an online buying group with some very interesting twists.
The key ingredient in this model is that participating retailers in indieBuyer place their order for a title prior to prebook date, and the eventual unit price for the title is set based on the number of orders the title gets by the end of its prebook period. Everyone gets the same unit price, no matter if you ordered one or 100. The supplier sets the initial price and target unit goals for when prices can be dropped. indieBuyer will act as distributor and pack and ship to participating retailers from a shipping location in San Francisco, for starters. It charges a transaction fee to suppliers for each order.
The organizers of this venture are the same folks that started Had to Be Made Films, which has been for the past two years pursuing avenues for indie film producers and suppliers to market and sell their product into the home video market through virtual film festivals and by running an independent film conference track and tabletop display area at the Video Software Dealers Association's (VSDA) annual convention in Las Vegas.
Their focus has always been in serving the “understandably underserved” mutual interests of the small, independent producer whose title rarely makes it to the top of most distributors' lists (if they are picked up at all) and paring them with smaller independent home entertainment retailers of all sorts who can differentiate themselves in the market by having an eclectic and cutting-edge selection of films the big chains and mass merchants won't have.
Mike Kyle, CEO of Had to Be Made/indieBuyer, explained to me that the intention from the outset has not been to build a distributor type of business competing with the likes of Baker & Taylor, but I wasn't necessarily surprised when he offered that during the VSDA show, two major studios expressed interest in indieBuyer as a possible outlet for some product.
indieBuyer is free and open to any and all retailers, big and small, to participate as much or as little in the online system (and claims to have 1,400 retailers already signed up), and the same holds true for suppliers, Kyle said. Whether his transaction fee is competitive compared with major distributors, and whether major studios and big retailers can find value in the system as well is secondary, Kyle said, to the future of indieBuyer. He believes there is so much content out there and retailers who are looking for it at the right price that indieBuyer's success doesn't require playing with the big boys.
It's an interesting model we'll be tracking this fall and into the new year.