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Indies Need to Wake Up

12 Jul, 2006 By: Thomas K. Arnold

When I was growing up one of my favorite songs was an old Moody Blues tune about living in a "land of make-believe … where heartaches can turn into joy," should you choose to not see, or accept, reality.

All too many independent retailers, I fear, are living in a land of make believe, deluding themselves that they are still critical to the home entertainment business and the studios had better wake up and start treating them better.

I hate to tell you this, guys, but the truth is, the studios have all but written you off. By some estimates, you only account for about 15% of the business, and the studios have the feeling no matter what they do they can't push the needle up and get you guys to buy more copies of certain titles they are really pushing. Then you go and minimize your impact even further by buying at Wal-Mart rather than through distribution, the only way studios really have of tracking what you buy.

In the beginning of this year, a high-profile direct-to-video sequel sold 1.1 million copies, of which 150,000 went into the rental channel. Of those, 100,000 went to Blockbuster, with indie rental dealers snapping up just 50,000 copies — according to official distribution tallies, of course.

Is it any wonder you no longer get screeners, much less co-op dollars or other perks?

We've come to the point where despite your chunk of the business I get the feeling the studios wouldn't care beans if you went away. And no amount of griping or sniping is going to change that. When Blockbuster changed the rental business by beefing up on the hits, you refused to budge. Instead, you filed suit against Blockbuster as well as the studios — a suit that went nowhere but left a real bad taste in Hollywood's mouth for you.

Then, when DVD arrived and the business shifted toward sellthrough, you stubbornly refused to change with it, maintaining you can't compete with the big chains and their deep-discount loss leadering. Well, you turned out to be right — you can't compete because you didn't even try. Couldn't you have focused on the non-hits, at least, or genres the big-box stores might have passed over?

As a last-ditch effort to make up for declining rental dollars, many of you turned to selling previously viewed DVDs and cassettes. The studios aren't exactly tickled over this, either: You keep all the dough, and now you're competing with them on the sales front. A three-week-old used title for $8.99 is a lot more compelling to many consumers than the same title, new, for $20.

So where are you today? The last survivors in a declining business, traditional rental, that in recent years has even been attacked from within by the new online subscription model.

And still, you refuse to change. You're like the dance band on the Titanic, playing on until your ship sinks.

And with digital downloading now a reality, and the "killer ap" of being able to burn downloaded movies to a regular DVD maybe a year away, the iceberg's in plain sight.

What are you going to do?

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