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Retailers, Consumers … and Thieves Seeing Green In Used DVDs

8 Nov, 2003 By: Kurt Indvik

It was serendipitous for us here at Video Store Magazine that Blockbuster chose last week to announce its holiday trade-in program, since senior editor Holly J. Wagner and senior reporter Enrique Rivero had been working for several weeks on this week’s cover story about the growing phenomenon of retailers, consumers and, unfortunately, thieves using DVDs as a form of currency.

Consumers are realizing that those discs they have been steadily collecting have kept their value quite nicely, thank you, and they are using them like shiny silver dollars to trade-in against newer DVDs they want to own, or simply for cold, hard cash.

The trade-in market at retail for home video is not necessarily new: A number of retailers have been very active both in-store and online, in developing a healthy business in previously viewed discs by taking trade-ins and still getting a very nice margin even at a previously viewed price. Music stores have been doing it for years with CDs, but to the extent that music can and is listened to again and again, I am sure the pace of DVD trade-ins will surpass that of CDs, if it hasn’t already. Because, indeed, while at first blush you may have really wanted that copy of Madonna: Truth or Dare, its allure has faded, and now you see it more as this 5-inch silver coin you can deposit somewhere for something else.

For the nation’s largest video chain to jump onto this side of the business certainly demonstrates that a critical mass has been reached.

“We think there is a growing market for people who want to monetize their movie library,” said Larry Zine, Blockbuster’s EVP, CFO and COO.

No kidding. DVDs are pervasive, and the pricing has stayed stable as demand for the product as risen, so a larger segment of the U.S. population is finding itself with an ever-growing collection of DVDs that have some significant worth. Despite their ubiquitous presence in our culture, DVDs still hold a generally high perceived value. High enough that the sales of previously viewed DVDs will be a $1 billion business this year, according to Video Store Magazine market research. And high enough that people are beginning to look at those DVDs piling up and they’re seeing green. And retailers are the primary money changers in this ever-growing market.

Then there is the nefarious side of the phenomenon. People are stealing DVDs from stores and from each other. Sure, “shrinkage” is a fact of retail life, but the notion of people’s growing DVD collections as targets for thieves — which is being reported with increasing regularity — is a sad side effect of this burgeoning used-DVD business.

Of course, a key problem, for both retailers and consumers who are ripped off, is that it’s very easy for thieves to, er, monetize their hot goods at any number of outlets, including other retailers, swap meets or, heck, their own garage sales.

This will be a challenge for law enforcement that will continue to bedevil them.

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