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Indies Find Creative Ways to Stay in the Video Game

5 Jan, 2005 By: Holly J. Wagner

Blockbuster's recent moves to swap late fees for a grace period followed by a forced sale, then to drive renters online with a $14.99 monthly subscription price, are putting pressure on all competitors, chains and indies alike.

The changes have indies understandably concerned, but some are coming up with crafty ways to stay in the game. Many indies are pushing copies of titles into previewed bins within a day or two of street date, as soon as rentals pay for one copy. For a while, many were ordering deeper on hot titles because they knew they would sell in short order, but price pressure from discounters and PVT price pressure from the big chains is forcing PVT prices down, making the business that has revived the industry for the past couple of years less lucrative. As a result, some are scaling back orders while others find new ways to keep up.

Some use trading programs at chain stores. Blockbuster has made the biggest noise about its trading program, but Trans World and the major game chains, GameStop and EBGames, also trade movies and games. And GameStop is expanding the model to its new MovieStop stores. Other chains are adding trades as well. Some buy from chains at low prices and sell at higher rates.

Some indies are taking prepaid preorders on hot titles, guaranteeing the customer they will have the one-night rental on street date as part of the price, then can pick up the disc to own three weeks later.

It's another way to let the customer see the movie as soon as the DVD is available without overestimating how much to buy, which could be a real risk on hot titles that discounters are likely to offer at deeply cut rates. If indies can't compete on discounts, they are certainly coming up with ways to balance their stock to match their shoestring budgets. Sometimes that happens Tuesday nights and Wednesdays at Wal-Mart.

Wal-Mart seems to be looking for ways to copy the little guys. With DVD sections already bursting and a seemingly endless stream of content moving to DVD, the chain reportedly asked studios to offer smaller titles burn-to-order at Walmart.com and let consumers pick up their purchases in the stores. The studios don't appear to be wild about the idea, but it shows how everyone, from the smallest mom-and-pop to the biggest 800-pound gorilla, is looking for ways to be more efficient and more competitive.

If even the mammoths are foraging for crumbs, there just might be an ice age coming.

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