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TK's MORNING BUZZ: The Home Entertainment Pie May Be Getting Bigger, But Don't Count On Getting a Bigger Slice

23 Jan, 2001 By: Thomas K. Arnold

There's no question that the home entertainment pie is getting bigger, with analysts across all spectrums, from the video industry's Tom Adams to merchant bankers Veronis and Suhler, predicting that consumers in the coming years will spend more and more money on bringing movies, games, music and other entertainment into their homes.

And yet at no point in recent memory have the key players in the home entertainment food chain been so concerned, so fearful, that they won't get their slice -- or if they do, that someone's going to take a big bite out of it.

That's why it's so important that everyone strategize and make plans on how best to ensure future survival, and that while doing so nothing is ruled out, no matter how improbable it seems.

Just a few years ago, who would have guessed that Blockbuster, the king of video rental, would strike strategic alliances with two sworn enemies of the video rental model. By agreeing to sell satellite dishes and service in its stores, and at the same time develop a video-on-demand service over the Internet, it would have appeared that Blockbuster is switching sides, or feeding the very same forces out to destroy it.

In hindsight, it made a lot of sense -- marking a realization on Blockbuster's part that the world we know and love is changing, and that if one wants to survive, one must adapt and go with the tide rather than against it.

Just yesterday, another announcement of a startling alliance crossed my desk: This one, between beleaguered Sega and Sony Computer Entertainment, whose PlayStation steamroller ran right over Sega's video game domination dreams.

From the Bloomberg news service: Tokyo, Jan. 23 -- Sega Corp. shares soared as much as 13% after a Jiji Press report that the maker of the Dreamcast video game console will supply its video-game software to rival Sony Corp.'s PlayStation 2.

Talk about strange bedfellows -- and yet, if you think about it, what could make more sense? Sega is struggling to hang on with its Dreamcast, while Sony dominates the video game console market with its PlayStation One and is poised to cement its position with PlayStation 2. If you can't beat, join' em, Sega seems to be saying, and in the end it just might save the struggling game maker's you-know-what.

That's the kind of thinking everyone in this business needs to adopt. The grass always looks greener on the other side. Granted, many times it isn't, but sometimes, just sometimes, it doesn't hurt to cross the fence and do a little nibbling, just in case.

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

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