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MTI Upping Sellthrough

29 Sep, 2004 By: Erik Gruenwedel

After years of eschewing its growing influence, MTI Home Video is embracing sellthrough as more than an afterthought.

The Miami-based distributor, which sports a catalog of more than 300 films, expects sellthrough to account for up to 25 percent of sales in 2005, but not without trepidation.

“I've always been really adamant about not dealing with sellthrough,” said Larry Brahms, president of MTI. “Being a product of the music industry, you could always gauge a company's success by the size of … their returns. The thought of shipping hundreds of thousands of units and then getting back hundreds of thousands of units just would have kept me up at night.”

A changing marketplace in which DVD has become a consumable combined with competitors' sellthrough interest in his catalog convinced Brahms that a business model predicated primarily on rental revenue sharing was akin to leaving money on the table.

“You are going to find this stuff at the dry cleaners and when you go to get gas,” Brahms said. “Right next to the stack of Coke is the dump bin of DVDs. And people are buying them.”

What people are buying are the impulse $5 titles that mass merchants, discount houses and drug stores crave.

“All of a sudden, the viability of our three-and-four-year product is actually worth more than when we first released it,” he said. “What we are finding is that the $5 bill equals independent action and horror films. That's a marriage that works.”

In addition to scouring its catalog, MTI is acquiring titles specifically for sellthrough, such as Without Evidence, with Angelina Jolie; Straight Shooter and Choke starring Dennis Hopper; The Bog Creatures; and a documentary on The Texas Chainsaw Massacre.

“We are picking titles with that in mind,” Brahms said. “We never did that before.”

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