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<I>Two Towers</I> Attacks Retail

28 Aug, 2003 By: Holly J. Wagner

The Lord of the Rings: The Two Towers got off to a towering start Tuesday as copies of the title flew off retail shelves.

Retailers of all stripes opened their arms to New Line Home Entertainment's second installment in the franchise with elaborate displays, product tie-ins and low first-week prices on the two-disc release (see merchandising chart and story, page 5).

New Line was guarding shipment figures more closely than Frodo Baggins guards the ring of power. Spokespersons for the label would say only that Fellowship was their hottest title last year, with 22 million copies shipped. With a box office take that bested Fellowship by more than $26 million, The Two Towers, once all versions are released, may race ahead. Video Store Magazine market research estimates Two Towers sold at least 4 million more theater tickets than its predecessor.

At a gala event to launch the title in Los Angeles last week (see photos, page 8), New Line SVP of marketing Matt Lasorsa said he expected more consumers to wait for the extended edition, due Nov. 18. However, New Line shipped about the same amount on the first version of Two Towers as it did on Fellowship's because DVD household penetration has grown.

Towers a DVD Essential

The consumer shift to DVD was apparent in shipments and at retail. A New Line spokesperson said the title shipped 85 percent DVD and 15 percent VHS. At a few Southern California Wherehouse, Borders, Virgin Megastore and store there were only DVD copies of the title on display.

A clerk checking receipts at the door of a Kmart shook her head as she glanced at a customer's receipt with The Two Towers included.

“Are there still any of these left?,” she joked. “I've been here since 8 a.m. and it seems like every single person has bought one.”

Rentailers also had rush on the title its first days on shelves.

Scott Whitmer, with midsized chain Video Depot, based in Palm Desert Calif. said his stores were underprepared for Two Towersrental demand. “We cut back our order in anticipation of lesser business in September, we basically fall of the face of the earth after the end of August.” But by the end of the day Wednesday, the day after Two Towers streeted, Video Depot store managers had already requested at least a dozen more copies, especially on DVD, Whitmer said.

Two Towers is selling more than renting,” said Michelle Coleman, marketing specialist for Petaluma Calif.-based midsized chain Bradley Video.

Marc Oringer, general manager for Manhattan-based four-store Champagne Video, said he couldn't keep copies in stock for sale or rent. All four stores were sold out by Wednesday at 5 p.m., he said, and the chain had ordered heavy, bringing in at least 100 copies for rent and 150 for sale in each store. For shoppers who couldn't get a copy on Wednesday, Champagne offered a deal, prepay for the DVD and get a free rental or $2 off the $22.99 pricing. Oringer made a late-night stop to Flash Distributors to pick up more copies and have them on hand when stores opened the next morning.

“We didn't want to turn anyone away,” he said.

Industry Prepped for Dual-Release

New Line executives were confident the extended edition title would ship more before the holidays because retailers were familiar with the tiered-release concept this year.

“We think people will be a lot more optimistic and will totally understand what the extended version is this year,” Justine Brody, VP of marketing for New Line, said recently. “We expect ordering to be a lot more aggressive. The manufacturing for that type of packaging is a lot more ambitious; we can't restock on a dime. We think people won't want to run out this year.”

The fact that shoppers know there will be an extended special edition release out in November didn't hamper sales of this two-disc version, Oringer said.

“If anything, I had a few people say they were going to hold out for the next version only because it has the DTS audio version,” he said.

Fellowship got a renewed rush of interest on sale and rental Oringer said, especially for the extended edition.Champagne brought in extra sale copies for the first title in the trilogy.

Many retailers took the opportunity to repromote and restock plenty of Fellowship product alongside Two Towers. And the first video release in the wildly popular series got a real boost from New Line's Two Towers marketing campaign.

FellowshipGets aTowersBump

Prior to the week of July 6, sales for Fellowshipon all formats had hit a plateau, according to Video Store Magazine market research. Using that date as a benchmark, the studio's advertising push for Two Towers also yielded a reinvigoration of interest in Fellowship with incremental increases in sales for the title leading up to the Two Towers DVD debut (see chart at right). By Aug. 17 — one week before The Two Towers even hit video shelves — sales of Fellowship product had increased 33 percent over the base week of July 6.

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