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Balancing Act

13 Jul, 2006 By: Thomas A., Jessica W.

It was a question of balance in Las Vegas this week, as the Entertainment Merchants Association (EMA) took a two-pronged approach to its Silver Jubilee convention.

On the one hand were the nuts-and-bolts issues critical to the trade group's core membership, independent video rental dealers: surviving day-to-day in an increasingly challenging environment.

On the other hand were next-generation packaged media and digital downloading of movies, the two directions in which the home entertainment business is heading.

And so it was that to get to the HD DVD demonstration Tuesday morning, retailers had to walk through a show floor populated by microwave popcorn, concession and disc-repair booths.

And the much-promoted Blu-ray Caf? — where representatives from Sony Pictures Home Entertainment were demonstrating movies such as Hitch on the only player now available, from Samsung — was around the corner from seminars on indoor tanning and cost-cutting.

Attendees praised show organizers for helping retailers take care of business and, at the same time, prepare for the future.

“I think it's not only useful, but it's also the right approach,” said industry consultant Tom Warren, who for years ran a small chain of video stores in North Carolina and is a past president of the Video Software Dealers Association, now the EMA.

“Retailers need this information,” he said “They have a lot of questions, and this is really the only place they can go for answers.”

Fritz Friedman, SVP of worldwide publicity for Sony Pictures Home Entertainment, said he was pleasantly surprised at how receptive retailers were to Blu-ray, once they had the chance “to see it, feel it, touch it, experience it.”

“We had close to 600 people come through here, and their reaction was pretty universally positive,” Friedman said.

Digital downloading also was front and center at the show. During the opening business session, retailers were urged to adopt an online presence and learn all they can about legal distribution, particularly now that the major studios are aggressively selling movies over the Internet.

At a seminar on consumer behavior, Russ Crupnick, VP and senior industry analyst for The NPD Group, said illegal downloading “has the potential to do a significant amount of damage to the video industry.”

One in four DVD buyers are already “borrowing and burning” DVDs, he said. “People are way ahead of the industry on this,” he said.

Even so, The NPD Group projects DVD will continue to grow slightly over the next few years, with an annual growth rate of 5% to 8%.

“There's a strong core buyer who likes the content and message of DVD,” he said. The challenge to studios as well as retailers: “We have to re-energize the passive buyer,” Crupnick said.

Despite the trade group's name change and recent merger with a video game association, the majority of the several thousand retailers in attendance were independents.

About 300 independent retailers rallied to kick off the show Monday with the Independent Dealers of Entertainment Association's (iDEA) second annual IndieFest.

The group touted 15 retailers who have been members of the trade group for more than 20 years.

The indie-centric group gathered to work on a case study for its Amazing Transformations program. IndieFest attendees brainstormed with Jeanne and David Chamberlain, owners of Video Plus, in Rice Lake, Wis., for a business makeover that includes a free consultation with industry vet John Farr.

The iDEA board is determined to come up with strategies for independent retailers to survive in a changing and challenging industry, iDEA board chair Jim Loperfido told his throng of fellows.

With an eye toward indies, Rhino Entertainment and WEA sponsored a party that featured a sneak peek at its coming lineup of hot music DVD titles for the fourth quarter.

The convention is an important venue for this kind of product, said Sig Sigworth, VP of video.

“We've really redoubled our efforts with independent retailers over the past six to 12 months,” he said.

The independent spirit of the show wasn't limited to retailers. About 20 independent filmmakers were part of this year's Filmmaker Program, now in its sixth year. Two panels focused on distribution issues for indie filmmakers, and the marketplace on the show floor allowed them to introduce retailers and potential distributors to their films.

Feedback has been great, said Mike Kyle, director of the Filmmakers Program. “There's really no other place, no one place that brings all of them together,” he said.

“Next year, we are planning on having real screenings. We really want to turn it into a festival, attract more distributors and really do justice to the filmmakers.”

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