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DVD Pricing: How Low Is Too Low?

24 Nov, 2004 By: Thomas K. Arnold

I told my wife I had the perfect present for our 15-year-old niece: The Legally Blonde gift set from MGM Home Entertainment. It comes with both Legally Blonde movies, a pink pen and notepad, and a collection of magnets sporting “Elle-isms — all in a nifty pink gift box.

“Oh, a DVD,” she sniffed. “Shouldn't we get her a real present, as well?”

Granted, I am an extreme case. Because I get free DVDs from the studios, no one in my immediate family takes DVDs seriously as something people actually covet and spend good, hard-earned money on. Even my kids would rather give a friend a cheap little board game than an elaborate, special edition DVD — even something really cool, like Bionicle 2 — simply because Daddy didn't have to pay for it, so therefore it has no value.

But I use this as a way of broaching an even bigger problem, and one that is really reaching its peak this week, as Black Friday and the bloodthirsty price wars that always follow the turkey by one day come to pass: DVDs are losing their value in the eyes of the public.

Just like last year, when consumers could buy Disney's splendid two-disc Lion King special edition for less than $10 at Wal-Mart, this year the equally lavish two-disc Aladdin special edition can be had for $9.99 at most of the big discount chains.

So can a ton of other big movies, including The Day After Tomorrow, a summer blockbuster that's only been available on DVD for less than two months.

Meanwhile, TV DVDs also are plummeting. Boxed sets of such hot shows as “The Simpsons” and “Buffy the Vampire Slayer” have dropped below $20, half what they cost initially.

On top of that are the jam-packed “dump bins” of $5 DVDs at Wal-Mart, and the spate of public-domain dollar DVDs.

Even online, Amazon.com's DVD home page offers more than 200 “DVD blowouts” for between $4.99 and $9.99, including Robert De Niro in A Bronx Tale and the recent megahit My Big Fat Greek Wedding.

The sad thing is, prices don't have to be this low. Consumers are still thrilled with DVD, and particularly with all the bonus materials $20 or even $30 is not too much to pay for something like the Aladdin special edition.

But the big retailers, in their greed, are turning DVD from a cherished collectable into an impulse item. And while they may end up moving a few more units — in large part because who's going to rent a movie for $3.99 when you can buy it for $5.99 and not have to bring it back? — I firmly believe they are leaving lots of money on the proverbial table.

It's almost laughable when you see things like “suggested list price” or even “minimum advertised price.” People are getting used to buying DVDs for just a couple of dollars more than a carton of milk. Sooner or later, that's got to cut into the gift market, which used to be a significant component of sellthrough.

I don't know anyone who's giving Shrek 2 for Christmas; it's so cheap, most people I know are buying it for themselves. And if people no longer do their Christmas shopping at the video store or the DVD department, well, sooner or later, that's got to hurt.

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