Another Lions Gate's Title Goes Flat14 Dec, 2001 By: Joan Villa
On the heels of one success, Lions Gate hopes to create another.
The studio will release its second title, the comedy The Wash, at a flat "under $40" VHS price March 12, citing a strong reception for its first foray into a flat-pricing model with the Feb. 19 title O.
Although final sales on O are not yet in, the studio expects to continue the flat-price program on other titles with similar box-office appeal, says executive v.p. of North American home entertainment Ron Schwartz.
"It's important for us to get some results first before we make any edicts on our future business plans," says Schwartz. However, he says, "I think you'll see similar programs from us on similar theatrical product that has major box office."
The Wash, written and directed by D.J. Pooh and featuring new music from Snoop Dogg and Dr. Dre, is expected to hit $10 million in theatrical receipts [WHEN?] since its Nov. 14 box office debut. The VHS prebooks Feb. 18 on the Trimark Home Video label. The DVD, priced at $24.99, prebooks Feb. 11 and will contain audio commentary, cast and crew interviews, bloopers and footage from the film's premiere.
O's sales will be tallied after its order close date of Jan. 28, but Schwartz says the initial response from retailers and distributors has been "overwhelmingly supportive."
"In our initial round of discussions with retail and distribution, they're saying ‘you gave us what we asked for,'" he says. "Clearly we're being told this is a good program, and the response has been so positive, we'd have been foolish to have our second opportunity [for flat pricing] in as many months and to lose the chance."
Retailers tend to prefer flat-price programs because the model simplifies buying by setting one price regardless of how many units they purchase. Most studios' copy-depth programs set minimum purchase requirements to be eligible for additional free or low-priced "bonus" units.
Todd Zaganiacz, president of the New England Buying Group and owner of Video Zone in South Deerfield, Mass., praises the move as the only remedy to stop sideways selling among retailers and used-tape brokers that bypasses studio requirements and cuts per-unit costs. The practice has hurt traditional distribution and been blamed for wholesalers' declining revenues.
"If [all] the studios were to take an about face and go to flat pricing, you wouldn't have those problems," Zaganiacz says.
Lions Gate's pricing move follows the lead of MGM Home Entertainment and Artisan Home Entertainment, which have both adopted low, single-unit rental pricing for most theatrical fare.