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Building Mass-Merchant Relationships Is Key for Suppliers

15 Jun, 2004 By: Jessica Wolf

Making sure they get into Wal-Mart and other mass merchants, connecting to their audiences and making the most of marketing dollars for smaller, niche titles are what's keeping independent suppliers in the game, a panel of indie senior executives said at the Third Annual Home Entertainment Summit: DVD Lucky 7 held in West Hollywood, Calif., last week.

Getting product into Wal-Mart has been a struggle, panelists said, but it's happening more as the indies build relationships with the retail giant.

Over the past year or so, Image Entertainment's business with mass-merchant accounts has increased “in the hundreds of percents,” said Barry Gordon, SVP of acquisitions for Image. The company will soon announce its launch into the feature-film arena as well, he added.

Bill Bromiley, SVP of First Look Entertainment, said his company has also grown, debuting more theatrical releases, getting into music-themed product and getting select titles into Wal-Mart and other mass merchants.

“Our business has probably increased more than 200 percent with mass merchants in the past year,” he said. “It was tough getting in. It's all about product and putting product that works on their shelves.”

In an increasingly sellthrough market, suppliers like Ardustry Entertainment are releasing what would have been (or were) second-tier rental titles and repurposing them for sellthrough.

It's working, said Cheryl Freeman, Ardustry's CEO. Ardustry's release of Oxygen, starring a pre-Oscar Adrien Brody, “has consistently been among the top 10 selling films at Wal-Mart since June of last year,” Freeman said.

Image's Larry the Cable Guy: Git-R-Done standup comedy release hit Wal-Mart's top 40 sellers this year as well, Gordon said.

However, just because the business is skewing toward sellthrough doesn't mean there's no rental alternative for indie product, panelists said.

“We're seeing that the rental model is changing, but there's still an appetite for it,” Bromiley said.

Gordon agreed: “Look at Netflix. They have a really robust business, but it's not built on Shrek 2; it's on Bollywood, it's on alternative lifestyle product, things that aren't as easy to find at the Blockbusters and the Hollywoods.”

Ground-Zero Entertainment has never been in the rental business. The company has learned to zero in on its very specific urban audience and its “success and excess” mentality, said panelist Anthony Perez, president of Ground-Zero Entertainment.

Ground-Zero's strategy is also to hone marketing money in on the “super Tuesday” mentality of its very music-oriented audience: voracious CD buyers and consumers who spend thousands of dollars in aftermarket car audio systems.

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