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East Coast Show Traffic Steady, But Event Could Move South Next Year, Organizers Say

1 Oct, 2003 By: Erik Gruenwedel

ATLANTIC CITY, N.J. — Donald Hall, owner of Fast Pace Video in Pasadena, Md., didn't mince words while waiting in a long line for a personally autographed copy of Hustler magazine at the East Coast Video Show (ECVS).

“‘Girls Gone Wild' is my biggest mover,” said Hall, underscoring adult fare's continued impact on independent video revenue. “I'm not complaining.”

Neither was Dean McGlaughlin, manager of Firestone Flicks in Glassport, Pa., whose concerns about the lack of a local distributor that doesn't charge “three bucks higher than Best Buy” appeared momentarily quelled by the purchasing opportunities at ECVS. “I'll make some connections and a couple of buys,” McGlaughlin said.After 10 years in business, Julie Ronk, sales manager for Family Video Plus in rural Wallkill, N.Y., came to the trade show to attend one of several seminars by online auctioneer eBay regarding establishing an Internet presence.

“We want to move beyond [what] our local area offers,” Ronk said.Though official attendance figures were not available from show organizers as of yet, exhibitors at this year's event were pleased overall with show floor traffic, which kept a steady pace over the course of the two-day show Sept. 30 – Oct. 1.

Show May Move South

Designed as a regional event, and held in Atlantic City for the past 14 years, show organizers nevertheless are talking up the possibility that the event might move to a more resort-like setting next year to boost attendance. Orlando, Fla., is one city being discussed, but organizers said they will be looking at many different possibilities.

“We need to freshen the show and provide closer access to additional retailers,” said Bo Andersen, president of the VSDA. “Florida may be a good idea, but Orlando is just one of many possible destinations.”

Regardless of their motivations for attending ECVS, the challenges and opportunities facing the video industry help to explain why sales and revenue are expected to generate $23.3 billion this year, according to Judith McCourt, Video Store Magazine market research director.

“DVD has grown at a greater rate than the decline of VHS,” McCourt told attendees of the trade show's business session Sept. 30. “Consumers will be the decision makers of when you drop the VHS format.”

The aforementioned sum doesn't include the largely overlooked previously viewed video revenue, which McCourt projects will top $1 billion this year.

“How quickly you migrate your product to PVV is key,” she said. “It's a question of balance.”

A panel of retailers at the session concurred, claiming that up to 15 percent of their revenue came from previously viewed video.

“Every unit has to earn its keep,” said Alan Goldstein, owner of First Run Video in Brattleboro, Vt. “If [a title] is renting, it stays on the wall. After one year, if it hasn't turned, it goes.”

The VSDA's Andersen further extolled the virtues of DVD at the business session, claiming that revenues in 2002, when combined with VHS, exceeded by 300 percent of all movie ticket sales of that year.

He said DVD turns in 2003 would exceed VHS for the first time, up 162 percent. DVD penetration in the home has reached parity with VHS, enabling what Andersen calls both a tremendous opportunity and challenge for rentailers.

He cautioned that unregulated rental late fees will drive consumers to alternative forms of video delivery, spurred in part by the proliferation of broadband that could allow the Internet delivery of movies to become trendy among illegal file sharers.

“We as an industry must respond,” said Andersen. “We have to reshape the morality of the Internet -- what is fair and is not fair in file sharing.”

The Shading of Money

In an indication that the video business isn't straying far from vanity, Herman Junkerman, owner of Movie Man Video, told attendees at a “town hall” meeting to consider diversifying their businesses with tanning.

He said adding just one entry-level tanning bed to a store located near a university afforded him up to a 45 percent return-on-investment on the $4,000 bed and “100 percent markup” on tanning products, including lotions and oils.

“It took the peaks and valleys out of [my revenue],” said Junkerman. “It saved my business.”

Junkerman cautioned retailers interested in opening a tanning section to talk with merchants already in the business, peruse various manufacturers' Web sites and investigate alternatives, such as tanning spray booths.

Junkerman's comments came during one of two such town hall, “ask the experts” gatherings at the show, where attendees could ask a panel of retailers whatever questions they had regarding the home video retail business. Other issues that were discussed at length included developing an online commerce model for rentailers, pricing issues, and employee hiring and training.

The event also included a flurry of sponsored receptions and parties on the first evening of the show.

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