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Staying One Step Ahead to Keep Up

2 Jul, 2007 By: Thomas K. Arnold

Rip Van Winkle could have just woken up after a 10-year sleep and not had a clue about what happened to home video. Ten years ago, VHS still ruled the day; studios were debating not if, but when, to implement rental pricing for this new format called DVD; and Hollywood was so concerned with Blockbuster's troubles that they rolled out a series of programs that would help Blockbuster and other rental dealers bring in plenty of the hits on the cheap to satisfy demand.

Today, rental is an afterthought to most studio executives, and VHS has been dispatched from even the most rural Wal-Mart. The hottest topic is how to manage the “supply chain” in the face of declining DVD sales and uncertainty about the looming transition to digital distribution.

The job of a studio executive has changed dramatically in the last decade. He's still doing a fair amount of schmoozing with key retailers, but technological advances have made it possible to know as early as 6 a.m. Pacific Time on street date whether you've got a hit or a miss on your hands. And the rest of the day is spent carefully tracking sales and replenishing orders here and pulling stock there to maximize that brief six-day period when more than half of sales typically occur.

I write this because we're in the middle of a particularly busy time for the home entertainment industry. We've just finished the annual Home Entertainment Summit and the Entertainment Supply Chain Academy conference, and the annual Entertainment Merchants Association convention, still our industry's biggest annual shindig, is less than three weeks away. Studio executives are stretched tighter than ever because of the flat market, which already has led to cutbacks and layoffs, as well as longer hours for the staff that remains.

The quest to make money is still first and foremost on everyone's agenda, but in this rapidly evolving business environment there's another, perhaps even more important objective: to keep up with all the changes our business has undergone, and to be prepared for even more changes in the future. Home entertainment is in the fast lane now, and if you're not up to speed, you won't just be left behind, you'll likely be run off the road.

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