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TK's MORNING BUZZ: Is Another Major Studio About to Cut Out All But Two or Three Distributors From Its Rental-Product Pipeline?

3 Oct, 2000 By: Thomas K. Arnold

The Three Musketeers they're not. Video Store Magazine editor-in-chief Thomas K. Arnold (center) is flanked by WaxWorks executives Noel Clayton (left) and Kirk Kirkpatrick during the opening night party of the distributor's trade show and conference. The theme: Operation: Allied Forces. (Hive News Photo)

OWENSBORO, Ky.--I tell you, it's great to be back here in WaxWorks' hometown for the distributor's first trade show and conference in three years.

The show floor is actually sold out, with nearly 70 exhibitors, and I'm seeing lots of familiar retail faces, loyal customers of WaxWorks for many years who say the distributor can't be beat when it comes to personalized service and support.

To be sure, some of my favorite retailers are conspicuously absent, such as Dave Rodgers of Video Dave in Frankfort, Ky. Dave is no longer in the business, but I'll never forget the enthusiasm he had for the business as recently as 1997, when he was bragging about his booming videogame trade and how it helps balance things out when videocassette rentals are slow.

Dave, and others like him, didn't make it, but many others did. And I'm happy to report that virtually all the survivors I spoke with last night at the opening-night party, sponsored by Fox Home Entertainment, attribute a large portion of their continued success to DVD, which appears to be flourishing even in the small rural towns and villages of the Southeast--maybe not to the degree it is in the big cities, but enough to at least partially offset the general decline in VHS rentals everyone, large and small, appears to be feeling these days.

The folks at WaxWorks, too, are quite optimistic about the future, despite the disconcerting reports filtering through the show that another major studio is about to cut out all but two or three distributors from its rental-product pipeline.

WaxWorks is wisely pumping DVD as much as it can, and offering retailers assistance in what many consider an inevitable transition in the coming months from VHS to disc.

Sadly, talking to retailers, it becomes apparent how vulnerable everyone is. Blockbuster and Hollywood are moving into smaller and smaller towns, and the areas the big chains have not yet penetrated are getting satellite.

Retailers are preaching as well as practicing the gospel of diversification, and if there's a general rule of thumb it is this: VHS rental may be your bread and butter, but it simply can no longer be your staple diet.

DVD needs to be integrated into everyone's product mix, and at the same time retailers need to look elsewhere as well for things to augment their packaged entertainment wares, be it tanning, pizza or movie merchandise.

Even in rural America, it appears, the VHS videocassette is rapidly going out of style.

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

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