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TK's MORNING BUZZ: Universal and the Cut-Out, Cut-Off Distributors -- It's Video's Version of the Hatfields and McCoys

19 Dec, 2000 By: Thomas K. Arnold

It's the video industry's version of the Hatfields and the McCoys, a full-on shootin' match between Universal Studios Home Video, which will only sell product through three distributors, on one side and the disenfranchised wholesalers, and their loyal retail customers, on the other.

Defiant retailers have been raising a stink in the press in recent weeks about how they are determined to continue buying Universal product through their own distributors, who are undoubtedly egging on said defiant retailers, in the wake of Universal's decision to yank rental, sellthrough and DVD product from all but Ingram and VPD (with Valley Media allowed to sell sellthrough and DVD product only).

Non-anointed distributors like Flash and WaxWorks have openly stated their intentions to get Universal product however and wherever they can, most likely from Canada, and have encouraged their accounts to stand by them.

Last week, Universal announced it was delaying by one week the Canadian street date of several top upcoming titles, including Bring It On and Rocky and Bullwinkle, with the express purpose of plugging the Canadian "leak."

This, in turn, has left some Canadian retailers mighty ticked, as this e-mail to me from a leading Canadian rentailer suggests:

"My hearty congratulations to Universal and Universal Canada. First, Universal decided that only a couple distributors in the USA should be able to sell their product, raising the ire of distributors and retailers alike.

"Now, when their plan looks like it may backfire on them, they turn an entire country into a second-class market that does not even rate the same street date as the USA.

"Where will this ridiculous process end? Canadian retailers deserve bettertreatment than Universal is providing them. At least U.S. retailers can buy their product from two distributors on the real street date. Canada no longer even has that option."

U.S. distributors are also indignant, with one telling me shortly after hearing news about the Canadian twist, "That's real smart--they're going to punish an entire country just to show us they're the boss." This distributor further said that despite Universal's efforts, he's still going to obtain Uni product, and that all the Canadian street-date delay has done is give him a new market.

"I'm going to sell copies to Canadian retailers, because now I can promise delivery one week before they come out in their country," he said.

Universal, it's your turn.

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