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MGM Steps Onto Tiered Pricing Path

18 Apr, 2003 By: Jessica Wolf

Industry watchers in the United Kingdom believe home video suppliers in the region are just waiting to follow in Warner Home Video's controversial tiered-pricing program instituted last summer.

According to reports, MGM Home Entertainment May 2 will release its latest James Bond hit, Die Another Day, under similar pricing terms as the ones set by Warner and, more recently, Fox Pathe, MGM's U.K. distribution partner. Unlike Warner and Fox, however, MGM has not made a blanket decision to release all titles simultaneously into the rental and sellthrough markets, while charging rental dealers a premium on VHS and DVD. The studio also has not released official across-the-board details on pricing changes, but representatives have been contacting individual accounts regarding the change in pricing for Die Another Day since late March, according to British trade magazine View.

“MGM reiterates its position, which is that it will take a view on pricing and holdbacks on a title-by-title basis and, as stated before, Die Another Day will go straight to sellthrough May 2,” an MGM spokesperson told View. “Individual account prices will be discussed directly with each customer.”

Rental dealers in the United Kingdom, as well as media tracking companies like Screen Digest, have predicted most, if not all, major studios will eventually follow suit. “Other studios are watching very closely,” said Helen Davis, senior analyst for Screen Digest.

And though tiered pricing is a change for dealers for the United Kingdom, it brings them to the same playing ground as other international markets, she said.

Rentailers in video markets like France, Scandinavia and Nordic territories have always paid a premium for the right to rent both formats, Davis said. A rental window was something suppliers “played around with” in other territories, she said, but did not necessarily offer all the time. “Premium price was linked to the right to rent rather than the window,” she said.

Fox Pathe is harnessing resources from U.K. antipiracy group the Federation Against Copyright Theft (FACT) to help police its new pricing plan. FACT officials have already begun visiting rental stores in the country and warning dealers against renting sellthrough-designated copies. Rental dealers in the region told View magazine they worry that this added policing would detract from FACT's push to curb piracy in the United Kingdom. However, Fox has kicked in additional funding to finance the increased responsibility, FACT representative David Lowe said in a statement.

Still, Lowe said, “The last thing I want to see is lots of people going to court. We've got a system of warnings and ways of pointing things out to people. We want to establish a level playing field.”

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