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TK's MORNING BUZZ: Who Foresaw the Flood of Litigation Sweeping Over Our Industry -- or the Dire Market Conditions That Brought Us to This Point?

26 Feb, 2001 By: Thomas K. Arnold

I don't think there's ever been a time in the home video industry's history that there has been so much litigation working its way through the courts. We've got retailers in Texas suing Blockbuster and the studios, we've got retailers in California suing Blockbuster and the studios, and now we have distributors suing one studio (Universal) and two distributors.

The essence of each case is that the plaintiffs believe the defendants have conspired to do them in.

This is hardly the scenario everyone predicted three and one-half years ago, when the video rental business was in one of its periodic slumps and industry leaders were in one of their periodic bouts with paranoia. Blockbuster was on its last legs. Blockbuster went to the studios and asked for a break. The studios gave Big Blue a break. And then, fearing exactly the sort of antitrust charges now being leveled against them, the studios gave all other retailers a break, as well -- provided they could make head or tail of complex copy-depth programs that introduced such new phrases as "free goods," "bonus goods" and "matrix" into our collective vocabularies.

No, I don't think anyone foresaw the flood of litigation sweeping over our industry -- or the dire market conditions that brought us to this point. I also don't think anyone consciously set out to mess up the industry.

It was simply a matter of our leaders scratching their heads and trying to figure out how best to solve their immediate problems -- which they did.

But that's the trouble with short-term thinking. It often leads to more problems down the road.

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

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