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TK's MORNING BUZZ: Artisan Home Entertainment Signs Revenue-Sharing Output Deal With Rentrak, But Will It Include DVD?

6 Nov, 2000 By: Thomas K. Arnold

You read it here first--longtime revenue-sharing holdout Artisan Home Entertainment has done what executives for years were saying they'd never do: sign a revenue-sharing deal with Rentrak Corp.

Retail sources say two options are available, both for six-month terms. One is an output deal in which retailers pay $3.50 per cassette up front and agree to turn over 40% of rental revenue, or a minimum of $1.15 per transaction, to Rentrak.

The other is a standard pick-and-choose deal in which retailers pay $8.30 per cassette up front and turn over 55% of rental revenue to Rentrak.

DVD may be included in the mix, at Artisan's option--although when the program kicks off with the Jan. 2 release of The Way of the Gun, only VHS cassettes will be included.

Artisan plans to release between 36 to 40 rental titles in 2001.

The regular reader of my column here on the Hive who furnished me with this information, a retailer I have come to respect for his insight and savvy, applauds this deal as leveling the playing field for all retailers.

"If I were in your position I would encourage other studios to do the same," he writes. Pending further investigation, I just might do that.

In the meantime, I really hope Artisan does start to include DVD titles in its revenue-sharing program. The big studios are very afraid that DVD will cannibalize sales to retailers of higher-priced rental cassettes, and all sorts of methods do thwart this are being discussed. Already, Fox andUniversal are testing a concept I think is most unwise: withholding the DVD release of certain hot new titles so that rental dealers can only buy them on VHS for a couple of weeks.

Other studios are talking about including DVD in future revenue-sharing agreements, and now Artisan has at least opened the door by saying future releases might be available through revenue-sharing on both formats.

Speaking of DVD, if anyone out there still doubts the mainstream appeal of this disc-based format, consider this: Friday night I stopped by the local Von's supermarket and right there in front of the store, sandwiched between leftover pumpkins and jumbo packs of paper towels, was a stack of Toshiba SD-1600 DVD players. "DVD players--$179," read the sign. "For Von's Clubmembers only."

This, at a chain that only began carrying sellthrough video five years ago...

Comments? Contact TK directly at:TKArnold@aol.com

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