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Rural Sensibilities

29 Nov, 2005 By: Holly J. Wagner

You people in Hollywood ought to get out more.I mean really out, into the heartland. I say this because I spent much of Thanksgiving week in Arizona and most of that in smaller towns, not the big three that folks in California know about.

From the coast it's easy to Monday-morning-quarterback things like Joe Malugen's avid pursuit of secondary markets. People in Los Angeles routinely dismiss "rural and secondary" markets as hicktown, places where people don't have newfangled gadgets like DVD players and flush toilets.

But let me tell you, people in those towns have DVD players now, and that makes them a goldmine for the retailers and rentailers who go there. A small town may have a single movie theater screen (some don't even have that), and a lot of movies would never get there at all but for DVD. It was tough to gauge the penetration of game consoles, but the game selection in the Movie Gallery stores is a clue.

These are places that have very little for youngsters to do outside of church and school activities. Not that there's anything wrong with church and school activities, but what's a teen to do on date night if there's no arcade or bowling alley or mall and only one movie screen?

A small town will often have a Wal-Mart and a Movie Gallery, no indies and few chain stores. The other chains in town will invariably include supermarkets and fast food outlets. It was very easy to see how those companies could grab some market share with DVD kiosks (I smell a Movie Gallery vs. Redbox showdown) for rental, or even sellthrough in communities that don't have a Wal-Mart.

So the next time you dismiss the business opportunity of a "rural or secondary" market or of DVD kiosks, I suggest you take a drive. A long one. You might rethink that assumption once you see how the other 90 percent lives.

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