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How Low Can They Go?

26 Jul, 2004 By: Stephanie Prange

I've been in this business long enough to remember a VSDA convention at which then-Disney-exec Jeffrey Katzenberg railed against the devaluing effect of McDonald's offering a $5.99 video with the purchase of a sandwich. At the time, he said $5.99 was a “suicidal price to charge if your goal is to have a healthy video business.”

In recent years, DVDs dipped past that price point to $5.88 at Wal-Mart and, in recent months, the price has dipped to $5.50 at Wal-Mart and Target. 99 Cent stores and others have gone even lower, albeit on budget product. At this year's convention, one distributor talked of 75-cent fare.

Certainly, the majors' move into distributing titles from secondary suppliers is an attempt to stave off the devaluing effect on ‘A' titles by feeding lesser-known titles to the $5.50 bins.

So far, this race to the bottom hasn't seemed to dampen consumers' perceived value or appetite for DVDs. But one can't help but wonder if — as Katzenberg warned nearly a decade ago — it someday will.

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