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TK's MORNING BUZZ: Why Don't the Studios Stand Up to Blockbuster and Call Big Blue's Bluff?

14 Feb, 2001 By: Thomas K. Arnold

Why are the studios so cowed by Blockbuster? Last week, a senior home video executive with one of the six major studios told me if Blockbuster decides not to buy a studio's titles, "you're screwed." And now comes word that Blockbuster chief John Antioco won't renew any expired revenue-sharing deal with the studios unless VOD rights are included.

Reportedly, he's already held Universal Studios Home Video hostage, refusing to carry any of the studio's new VHS rental titles -- including Bring It On and Rocky and Bullwinkle, both of which streeted yesterday but were conspicuously absent in Big Blue corporate stores -- until an inclusive deal is signed.

Sources say Universal gave in and pen should hit paper momentarily. Sources also say Universal was happy to get only a slight dip in its VHS minimum, with Blockbuster guaranteeing to buy about 4% fewer copies per title for the duration of the contract.

Guys, where are your huevos?

I can't for the life of me understand why the studios don't stand up to Blockbuster and call Big Blue's bluff. Universal has a powerful hit parade of titles coming out, and I'd be surprised if Blockbuster would really follow through on its threat and not buy any Universal rental cassettes if the studio had stood its ground and not signed over VOD rights.

Already, I predict Blockbuster is going to generate a tremendous amount of ill will for not having copies of Bring It On in its stores the same day every other video store did. This is a huge title, and even Blockbuster managers are reportedly upset with corporate for not allowing them to put the title out on the floor until a deal is signed. One Blockbuster manager likened it to "cutting off your nose to spite your face"; another questioned the wisdom of his fearless leader in keeping copies of the VHS cassette "in boxes in our warehouse" instead of out on the floor, where they belong.

Studio executives privately say they are very worried about the monster they helped create -- a monster they're now afraid can and will eat them if they don't pander to its every whim.

But someone needs to stand up, now, and take the risk. If not, things will only get worse. A lot worse.

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

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