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Name Change Reflects Sea Change in Industry

21 Dec, 2004 By: Holly J. Wagner

Although a large segment of the industry has been known as “rentailers” for a long time, the hybrid term has never been so accurate before.

When I first encountered the term, it was clear that it meant a unique retail niche, something that was neither fish nor fowl — a business that operates like a retailer, only with temporary “sales.”

This year, the industry changed so much that “rentailer” has really come to represent the blending of rental and retail. Beyond new sellthrough, the used trade has kept a lot of businesses afloat and a few in the clover even amid sagging rentals.

Even rental chains that long limited their sales to rental selloff got into the used-trading fray. What choice have they had, with discounters and big boxes on pricing jags that sometimes look like Sherman's march to the sea? It's arguable that used trading with consumers amounts to really, really extended rentals, but it's still a sale.

The National Entertainment Buyers Group, formerly the New England Buying Group, is developing software for independents that will help them determine what to buy and how much to pay for it. They may prefer different titles from chains, but the software should eliminate a lot of the fear of leaving a less-experienced person to mind the store when it comes to buying from consumers.

Our upcoming name change to Home Media Retailing reflects the track the industry has been on for a long time. It has become increasingly difficult for businesses to live by rental alone.

Like it or not, DVD pricing and durability have made this industry much more sales driven, so that even rentailing involves more mainstream retailing than ever before. We won't forget about the pure renters, although I expect it is going to get harder and harder to find them.

Blockbuster's move to end late fees as we know them brings the term rentailer full circle. Products start out as rentals, but if you're too much of a slacker to get a title back within nine days, it becomes a sale — a true “rentail” transaction. It will be interesting to see how customers — and competing rentailers and retailers — respond.

Some are already making plans, as posts on the VSDA discussion board, the National Entertainment Buyers Group Web site and our own online poll (at right) show.

Most in the industry complain that it's tough to make money on new sellthrough. Thin margins and competition from discounters see to that. Late fees, whatever you call them, rack up significant income. Indies don't have the same tolerance for stock being out of circulation, or for grace periods. Some are also chattering that rev-share policies, especially through Rentrak, will charge dealers more for extending rental periods if it goes on the books as another rental, instead of a late fee. That may just be a matter of terminology; it may be possible to come up with a plan that compensates the dealer for late returns without penalizing him for doing it.

Looks like next year, we will all — some more voluntarily than others — plunge into Home Media Retailing together.

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