Hollywood Entertainment Signs DVD Revenue-Sharing Deal With MGM6 Aug, 2001 By: Hive News
Hollywood Entertainment Corp. has entered into a new VHS and DVD revenue-sharing agreement with MGM.
Hollywood Entertainment revenue shares VHS with all major studios. The MGM agreement is Hollywood Entertainment's first revenue share agreement that includes DVD. The company says that the growth of DVD will increase consumer spending on movie rentals and both the studios and retailers can increase their revenues and profit under revenue-sharing agreements.
Commented Mark Wattles, founder and president of Hollywood Entertainment, "As a result of Blockbuster Entertainment's comments on their Q2 conference call regarding revenue sharing on both VHS and DVD we have received many questions about our position on revenue sharing.
"We are interested in and anticipate entering into additional DVD and VHS revenue-sharing agreements that allow us to satisfy customer demand in both formats and maintain our existing combined VHS and DVD margins. We are also willing to carry DVD titles under these revenue-sharing agreements that we would otherwise not have carried because the fixed cost was too high."
Continued Wattles, "Based on my discussions with the studios it is their desire to insure shelf space in our stores, maintain their existing margins, and share in the upside revenue that the industry is experiencing as a result of consumers lifting their rental habits when they acquire a DVD player. We believe that both MGM and Hollywood will increase their revenue and profits from MGM titles in Hollywood Video stores as a result of our new agreement."
Hollywood Entertainment Corp. will be releasing its second quarter earnings August 7, 2001 and will hold a conference call at 10:00 am Eastern Daylight Time.
Stay tuned to Hive4media.com for updates from Video Store Magazine.