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TK's MORNING BUZZ: Do Studio Executives Believe Rental Pricing for DVD May Yet Lie in the Cards?

9 Apr, 2001 By: Thomas K. Arnold

Good Monday morning. I received quite a few e-mails over the weekend, all of them in support of sellthrough pricing for DVDs -- and all but one of them from independent video retailers.

I received one interesting e-mail from a retailer in Australia who says three of the six major studios -- Universal, Fox and Buena Vista -- have already moved to rental pricing for DVDs in Australia, with a three- to four-month holdback.

That's alarming, because quite often studios test things out in international markets before adopting them here in the United States. Australia, in particular, is a favorite among the studio testers because market conditions are so similar to what they are in the United States. Warner Home Video, in fact, lumps Australia in with North America under the executive v.p. auspices of Jim Cardwell.

Warner, however, isn't about to join this test. Warner is home to some of the sanest and savviest minds in Hollywood, and they're not about to tinker with a successful DVD pricing strategy and risk messing things up.

I've said it before, and I'll say it again: Keep DVD at a sellthrough price. To go rental, or even to talk about going rental, is sheer foolishness, particularly at this stage in the game.

But you all know how I feel. And I know how most of you feel. Indeed -- the retail community seems united behind sellthrough pricing for DVD, with both the big sellers -- Best Buy among them -- championing a low list price with as much passion and zeal as the independent rentailers.

The only dissension on the retail side seems to be coming from Blockbuster, which very badly wants a rental window for DVD -- so badly executives have been hammering at studios with a little road show of sorts, and statistics they claim show money being left on the table.

I wonder, is their side gaining any momentum? This week, I'd really like to hear from some studio executives who believe rental pricing for DVD may yet lie in the cards. I've love to hear your reasoning and share it with our readers here on the Hive. And if you'd like to remain confidential, that's all right with me.

I'll report back.

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

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