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Does the VSDA, NARM Merger Make Sense?

13 Jun, 2004 By: Kurt Indvik

The digital era has created an opportunity for a diverse range of entertainment media to be melded together with increasing frequency as home entertainment hardware has become more convergent across platforms. Video games and DVD are finding their way together on more and more occasions. Of course, music DVD is one of the fastest-growing genres in home entertainment software. And we're seeing music play an increasingly important role in the development of video games.

So it's no surprise that the Video Software Dealers Association (VSDA) and the National Association of Recording Merchants (NARM) have entered into formal talks exploring the idea of merging the two trade groups together as was announced last week.

Both groups recognize that their memberships have more in common than ever before. I am not able to get information on what the overlap is in membership between the two groups, but I suspect it's pretty significant. Certainly, music retailers have embraced home video in a big way. Many music retailers report that home video accounts for as much as 50 percent or more of their total revenue, and without video they would likely be out of business.

On the video retailer side, the music DVD genre is one that they are starting to embrace to a greater extent, something they share with music retailers. And, of course, the video game business is one that home video retailers have been pursuing for some years now.

The fact is that today you could safely meld not only the VSDA and NARM memberships, but also that of the Interactive Entertainment Merchants Association's (primarily game retailers) into a home entertainment software retailer category, since they all share elements of each other's businesses. In fact, these three groups are part of the five-member Coalition of Entertainment Retail Trade Associations (CERTA) that was formed earlier this year as a lobbying and public relations coalition that seeks to advance the shared interests these groups naturally have in delivering entertainment to consumers.

The VSDA and NARM have reportedly been dancing around the merger idea for years, at one point creating a committee several years ago to explore the options of how the groups could join forces.

Interestingly enough, the VSDA's recent creation of an autonomous division for independent retailers, the iGroup, may share a strong affinity with many of the indie brethren on the NARM side who struggle to compete in the landscape of major chains and mass merchants.

Over the course of the next several months, the two groups will be creating a list of positive and negative attributes to a possible merger, and we'll have to wait and see how it all shakes out. I'd like to hear video retailers' viewpoints on the merger idea. Send me your comments and let me know if we can use them for publication in Video Store Magazine or on this Web site. I can be reached at the e-mail link at the top of this column.

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