Columbia TriStar Hangs Up Retail Connect30 Oct, 2003 By: Holly J. Wagner
Columbia TriStar Home Entertainment (CTHE) has scrapped its controversial Retail Connect program, which was already fraught with delays, studio executives said.
“While we still feel that there would have been a benefit to this program, during implementation we encountered a number of logistical obstacles,” said a studio announcement. “These problems had the potential to jeopardize the level of service we strive to provide to our customers. This is a risk we simply were not willing to take.”
The studio had envisioned the program to streamline business operations between it and its retail and rental customers, but logistical problems of some retail channels being able to incorporate the program into their operations became much too problematic, said Marshall Forster, EVP of CTHE N.A.
“It's not to say this is not impossible to do over a period of time, but the amount of time and effort it would have taken was too long,” he said.
The studio promised to destroy credit applications submitted under the program to prevent their misuse.
Retail Connect, initially planned to start this month and already delayed until next March, was not popular among independent dealers who spoke to Video Store Magazine. They expressed little surprise that the program never got off the ground, with most citing rental pricing for the rapidly sunsetting VHS format as the culprit.
Forster said that since pricing was an issue between CTHE's sales agents and the customer only, it had no bearing and was not a consideration regarding CTHE's decision not to implement Retail Connect.
“The market has changed so dramatically, and Columbia has historically been behind the trend,” said Doug Aita, owner of Tape King in Bozeman, Mont. “Our new-release rentals are now running 75 percent to 80 percent DVD on many titles, and this is before the holidays. We're seriously considering not buying any rental price VHS after the first of the year. I'll have to see what my numbers look like at that time, but it's a very strong possibility.”
He added that, “Basically, Columbia missed the boat and should get on the sellthrough bandwagon, or at least offer an output deal through Rentrak.”
Indie Mike Frese, owner at Movie Tymes, Lake of the Ozarks, Mo., speculated, “The independent business that Columbia has received the past couple of months due to their horrible VHS pricing is significantly down. Because of that pricing, we just do not make up a significant amount of business for them.”
Keeping the status quo is no problem for him.
“I am happy that they decided against it. It will be easier to deal with one less entity for getting product. Time is scarce for me,” Frese said. “I have an excellent sales rep. I doubt if any direct studio rep can give me as good of service as she does.”
“With the apparent success of Warner's new revenue-share pricing coupled with the continuing trend of sellthrough by the other studios, it is not really a surprise,” said Ray Jewell, owner of Mister Video, Athens, Tenn.
Distributors Ingram Entertainment and VPD were to act as CTHE agents performing sales functions, fulfilling orders, processing credit, invoicing, collections and returns. Eligible retail accounts would have kept a direct credit relationship with the studio and options for direct participation in sales and marketing. VPD declined comment for this story.
“We are supportive of Columbia, however they wish to go to market,” said Ingram Entertainment president David Ingram.
Additional reporting by Kurt Indvik.