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HIVE EXCLUSIVE: ETD Exits Video Distribution

19 Nov, 2001 By: Thomas K. Arnold

Veteran distributor ETD has abruptly exited home video, opting to focus on its core magazine and book business after failing in an attempt tocontinue getting new release product from the studios.

Chairman and c.e.o. Ron Eisenberg could not be reached for comment, butsources say as many as 200 employees will lose their job. Full-service distribution centers in Dallas, St. Louis and Canada are being closed.

Sources say ETD, which has been a leading national home video distributor for more than two decades, had been faltering in the wake of the decision last year by two studios, Warner Home Video and Universal Studios Home Video, to make fundamental changes in distribution.

Warner yanked its rental line from all distributors and began dealing directly with retailers, while Universal pulled its entire line from all but three wholesalers. This made it difficult for most wholesalers to offer their retail customers a full selection of product.

"It's difficult for all distributors right now," says one source. "The studios are losing confidence in distribution."

ETD executives would not comment, but sources say the final blow came when 20th Century Fox Home Entertainment wouldn't sell ETD Planet of theApes unless the wholesaler paid in advance -- "and nobody can do that." At that point, mounting concerns that the Fox situation "would have created a domino effect with other vendors" prompted ETD executives to decide to close down video operations, sources say.

Fox executives would not comment.

ETD is the second video distributor in recent months to rethink its commitment to the sector. Valley Media quit VHS rental entirely in Apriland recently began focusing on feeding DVD to its music accounts.

"I think it's another very sad event in the industry," says Steve Scavelli, president of Flash Distributors and a board member of the National Association of Video Distributors (NAVD). "It's a continuation of sad events resulting in retailers having less distribution choices,which can only lead to increased costs and decreased service."

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