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Growth, Value and Balance Priorities for 2002 -- Part 7

28 Jan, 2002 By: Thomas K. Arnold

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

Amodei: Listening to the trends and the trades instead of listening to their own gut and business instinct.

Andersen: For retailers, the biggest mistake would be to ignore customer satisfaction and customer service, even for a moment. For studios, it would be to believe the false predictions about VOD.

Blanken: I think there are a couple of "core" mistakes retailers need to avoid. One is complacency in regards to their rental/sale rights. The second is to adhere to old business models and philosophies. DVD, while still primarily a medium to deliver movies, is a different monster than VHS. Sales demand is greater (both new and used) than VHS has ever been. Cost issues are different. And satisfying demand, both in rental and retail, is more important than ever. The three biggest mistakes studios could make this year are 1) believing that continued attempts to eliminate the "middle man" (distribution and retailers) in their efforts to deliver product to the end user will yield better profitability; 2) continuing to distribute product in an inequitable fashion to various retailers; and 3) changing the cost philosophies in regard to DVD pricing before a point when the consumer marketplace is able (or willing) to adjust to such a change.

Chapek: To underestimate the long-term potential of the DVD marketplace.

Fink: For retailers, not taking advantage of the growth in DVD and all it has to offer as well as giving up too quickly on viable VHS cassettes which still have a life in the marketplace. For studios, not doing everything and anything possible to maintain the momentum this industry has generated over the past year.

Malugen: Both retailers and studios need to maximize profit margins on DVD. How we make both happy is the question. It needs to be a win-win situation.

Scavelli: I think it would be a mistake for anyone to think that VHS is dead and also to think that VHS can be sold or rented profitably for $45 when the same movie is available in a better format, DVD, for one-third that price.

Sooter: Abandoning VHS.

Thomas: Underestimating the consumer appetite for great movies on DVD.

Thrasher: Not listening to your customers. We as an industry have done a good job over the years both in educating and listening to the consumer. DVD is the fastest-growing format ever and the biggest reason for that success is the low price point offered from the outset. It would be a huge mistake to see prices rise on DVD because of an outdated formula.

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?

What is the single biggest challenge facing the video industry this year?

Will 2002 be the year for VOD?

What advice would you give your colleagues?

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