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East Coast Video Show: Get Down to Business, VSDA Leaders Advise

12 Oct, 2001 By: Anne Sherber

ATLANTIC CITY, N.J. — Return to “business as usual” as soon as possible despite lingering effects of the Sept. 11 attacks, Video Software Dealers Association (VSDA) chairman Tom Warren and president Bo Andersentold video retailers gathered for the opening business session of the East Coast Video Show.

Various trade sources reported an uptick in video rental activity in the days following the attacks, but Andersen and at least one retailer, John Tartaglia, buyer for Philadelphia-based Movies Unlimited, said there is little change in business volume from last year.

Andersen reassured and cautioned retailers at the same time about emerging technology's threat to the packaged video industry. On one hand, he noted, newly cautious investors are not inclined to fund newbroadband delivery initiatives and the cost of DSL, T-1 lines and cablemodems are unlikely to drop in a recession. The technologies deliver movies to computer terminals, which lack the high-end sound and picture systems to which many end users have grown accustomed.

On the other hand, he noted, studios have declared their intent to cut retail out of the movie delivery equation and the video industry ispreparing to do battle in defense of the First Sale Doctrine.

“It's apparent that we will have to fight for the right of retail to sell this product,” he said. Though he believes the threat to retailers is “overreaching by the copyright holders,” the debate is under way.

Retailers in Australia, he noted, are awaiting a court decision that will determine whether they can rent DVDs purchased from discountretailers. Studios have made the battleground the copyright for the computer programming that enables DVDs to play, rather than thecopyrights for the movies themselves.

Of deeper concern to retailers was the prospect of a change in the DVD business model.

“DVD has given us a way to be profitable again,” said Michael Becker, owner of Video Room. “Switching to a two-tiered pricing system now would be silly.”

Video retailers shared information about the nuts and bolts of integrating DVD into their businesses. Dave Stevenson of Big PictureVideo in Liverpool, N.Y., says he is “sick of revenue-sharing programs,” and will make his business 100% DVD by the end of the year, cutting out VHS completely.

Becker, whose Battery Park City store is four blocks from the site of the World Trade Center disaster and was closed for two weeks after theattacks, says he is buying more copies in DVD than VHS. DVD accounts for about 60% of that store's rental turns.

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East Coast Video Show

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