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APAR's WORKING WEEKEND: Disney Exec Takes Dead Aimster at Rental Biz

6 Jul, 2001 By: Bruce Apar

The New York Times may be the newspaper of record for some, but apparently it’s not at the top of the list for the people in video retailing who push their opinions online.

By the end of this week, we were more than slightly surprised to not see any evidence, in the usual places, of retail reaction to a bombshell Disney dropped that had nothing at all to do with its summer box office hit Pearl Harbor.

The New York Times last Monday (July 2) published a news analysis about how The Walt Disney Company these days has “a fair number of executives… spending a lot of time thinking about how to bypass… the distribution channels that Disney relies upon to deliver content to consumers.”

In the article, The Times attributed chief strategy officer Peter E. Murphy as “trying to figure out how Disney can extract more money from its content and also build stronger, more direct relationships with customers. Standing in his way are gatekeepers like cable systems and video rental shops.”

Murphy, the article continued, “estimates that Americans spend about $2 billion a year renting Disney home videos.” But then, the punch -– or should we say knockout –- line: “Disney gets only 30 to 35% of that, he says, and he wants more.”

According to this Murphy’s law, “the video rental gatekeeper would be cut out of the business model,” says The Times, by Disney’s “datacasting” its movies directly to home viewers via television broadcast signals (it owns ABC).

Now you can understand our astonishment at how this revelation in a paper with the influence of The New York Times has virtually fallen on deaf ears this week on the home video industry’s 24/7 Internet grapevine.

By now, we thought, there’d be all kinds of indignation from places like the Video Software Dealers Association. So far, we haven’t heard or seen much noise at all. But just wait: the next sound you hear will be that of a delayed reaction that will have us thinking we’re still hearing fireworks from the Fourth.

It’s understandable if retailers these days have mixed emotions about digital home delivery of movies, given the stance of Disney’s Murphy and the collective shouting down by Hollywood of Napster cousin Aimster. That’s the online service Disney and five other studios sued recently for infringing on their copyrights by letting anyone copy movies from DVDs and swap them online with others, all without paying for the online copies.

Put Disney’s on-the-record comments from Murphy together with the studios’ legal action against the likes of Aimster and one could draw the Frankenstein conclusion that Hollywood could be heading toward a time when video rental outlets are the subject of as much open disdain as Aimster.

Comments? Contact Bruce directly at:bapar@advanstar.com

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