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Growth, Value and Balance Priorities for 2002 -- Part 5

28 Jan, 2002 By: Thomas K. Arnold


What do you perceive as the single biggest challenge the home video industry faces in 2002, and what actions should we take to address this challenge?

Amodei: Making sure we do not overcook the golden goose.

Andersen: The biggest challenge will be maximizing profitability and protecting the future of the rental and sellthrough sectors. One action, among many: Leverage the marketing, customer service and customer loyalty built (at tremendous expense) by retailers into continued growth of the home video money tree.

Blanken: Legislative issues, particularly Copyright Law and the DMCA, may prove to be the biggest challenges. The VSDA, and others, must aggressively and successfully protect both the consumer, and the retailer, against the dangers of diminishing their rights under the First Sale Doctrine.

Chapek: The risk that the consumer may be led to perceive DVD as a commodity, instead of a high-value premium product, especially while the DVD marketplace is in its relative infancy.

Fink: To maintain the momentum of the past year in the home entertainment industry. To continue the growth of the DVD hardware and software business while not losing sight of the industry as a whole. To continue to aggressively advertise and promote releases and as well as the home entertainment industry itself. Our business has been reinvigorated thanks to the success of DVD and we should continue to capitalize on that

Malugen: DVD pricing and two-tiered DVD releases.

Pagano: The efficient transition from VHS to DVD. There is need to balance the emerging upside of DVD with serving the huge installed base of VHS renting and buying consumers.

Scavelli: I see two major challenges. The first is the method and timing of the "similar" pricing of the DVD and VHS formats. There is no doubt that as the year progresses, every studio will have to make monumental choices as to what to price each format at, possibly on a title-by-title basis, or possibly based on a matrix of "saleability," and that matrix will need to be examined and reevaluated weekly. The second major challenge is going to be the issue of piracy and illegal downloading of content, mostly via the Internet. If this is not carefully watched and controlled, the industry will be in for a huge revenue loss of monumental impact.

Sooter: Keeping the momentum going! The sellthrough business in the fourth quarter was a win for everyone. We need to keep the consumer enthusiastic and retail excited about making hits an event again.

Thomas: Our biggest challenge in 2002 will be to expand DVD's retail presence in order to ensure DVD reaches its full potential in the shortest period of time.

Thrasher: The biggest challenge we face is a growing sameness or blandness of product. That it becomes too manufactured for mass consumption without any real substance or value. That interesting or controversial subject matter will never be seen or heard because profit or political correctness becomes so overwhelming in deciding what films get made. Sadly, consolidation is not over with. There will be fewer choices for a lot of folks due to that fact. As it is, studios as divisions of gargantuan companies face enormous financial pressures to deliver the dollars with a business history that would suggest that is very difficult to keep pumping out the hits while effectively managing costs. Support the independent as much as you can on both the retail and supply fronts.

Read more:

How big is the video market and are bigger things ahead in 2002?

Are consumers' video habits changing?

Is DVD cannibalizing rental-priced VHS?

What does the future hold for DVD extras?

Will 2002 be the year for VOD?

What would be the biggest mistake retailers or studios could make in the coming year?

What advice would you give your colleagues?

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