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Used-Disc Trade Blurs Traditional Retail, Pricing Lines

7 Sep, 2004 By: Holly J. Wagner

It's become apparent that DVD trading is the model of choice for a lot of consumers. It offers a very attractive entry point for people who want to start or build collections.

Blockbuster is making good on its promise to bring trades into its stores. In advance of the Labor Day weekend, several stores in my neighborhood were getting flash makeovers that include more shelf space devoted to used discs and huge banners advertising that the chain offers a minimum of $5 in store credit for any DVD it buys from a consumer and a maximum of $35 for games.

Trans World hasn't made nearly as much noise about it, but that chain, with nearly 900 stores under a half-dozen brands, has been doing consumer trades for a long time. And it has the added allure of letting the consumer choose to sell for cash or slightly more in store credit. Both chains promote the used trade with lists indicating which titles have the highest bounty.

Game chains EB Games and GameSpot have been trading games with consumers for quite a while and both recently got into DVD trading, especially in areas that have a lot of appeal for their customers — anime and sci-fi, notably.

It's a smart way for chains to bulk up on catalog and other product. Although Trans World has exited the rental arena, Blockbuster is expanding online. The used-disc trade in stores offers several benefits. For one, the chain is likely to bring in titles that might be hard to find and almost certainly would cost more to stock from studios or distributors. After all, aren't all discs used after the first time you play them?

The Movie Gallery e-newsletter that arrived in my e-mail box today is already promoting the availability of pre-viewed The Passion of the Christ Sept. 13.

It has become pretty standard that PVT are available within a week or two of the same titles' street dates. Chains can use their amassed data to gauge when a title will fall out of rental favor or just how soon they can afford to start selling off titles as PVT.

The used-disc trade has so far been a boon to retailers large and small. But as it takes hold, it may have a couple of downsides that have not yet been factored into the equation. Chains that have enjoyed near icon status among consumers will have to compete not only among themselves, but against savvy consumers.

Used discs have opened up a layer of trade that is completely outside of traditional retail. Consumers are figuring out that they can get more for their used titles by selling them on eBay (alongside some studios and Movie Gallery) for more than a video or music store will pay, especially for TV DVD.

Then there are the new upstarts like peerflix.com, barterbee.com and filmtrader.com, that seem to be springing up faster than weeds in an herb garden to let consumers trade among themselves. One-for-one trades are about as close as you get to full value.

Finally, consumers are training themselves that anything more than $10 is too much to pay for most movies. Even when a high-def format makes it to market, it will not be easy to convince consumers to pay $10, $20 or $30 more for it.

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