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NAVD Attendees Get Down to Business

22 Apr, 2004 By: Erik Gruenwedel

To hear attending home video distributors and studios at last week's 21st annual National Association of Video Distributors (NAVD) conference in Santa Monica, Calif., was to witness an industry addressing “muscles and bones” issues with a sense of calm, said Kirk Kirkpatrick, president of distributor Waxworks.

“I was impressed by the sense of partnership by the studios,” he said. “They seem interested in the health of the retailers.”

Kirkpatrick said that while the decreasing cost of goods for rentailers is disconcerting to studios, a thriving rental market acts as an ongoing deterrent to piracy. “When a movie is $3.50, there is not the incentive for piracy. Why go out and make a copy?” he said.

Distributors attending NAVD included Baker & Taylor, Flash Distribution, Ingram Entertainment, Video One Canada and Waxworks.

Suppliers included Buena Vista, Warner, DreamWorks, Columbia Tri-Star, Hart Sharp, HBO, New Concorde, New Line, Paramount, ProActive, Fox and WEA, according to NAVD executive director Bill Burton.

“I'm very pleased with the studio and vendor participation,” Burton said. “We had five new vendors and about 60 attendees.”

Although participants addressed ubiquitous issues such as arrival of product and street date violations, these subjects didn't dominate one-on-one sessions with studios, he said. “Street date violations occur, but it is not the issue that it once was,” Burton said.

Ingram Entertainment's Bill Bryant said increased attention to budding next-generation DVD formats was on everybody's mind as was the ever-shrinking VHS market. “We need to be aware of when we would begin soliciting the format and how that would compete with existing formats,” Bryant said. “With DVD selling so well, it is almost premature to introduce another format. It might confuse the retailer and consumer.”

DreamWorks' Kelly Sooter agreed.

“I think people are pushing it a little bit faster than it needs to be pushed,” said Sooter. “I think the consumer today isn't looking for the next-generation DVD.”

She said that as high-definition TV becomes more commonplace, including programming, new DVD formats would begin to take off among consumers. Until then, she said it's almost “overstimulating.”

On the flipside, most distributors appeared reluctant to throw in the towel on VHS.

Bryant said the studios want to keep the format as long as it makes sense economically, while at the same time eliminating excess VHS inventory.

“Some studios are keeping kids and family [VHS] fare priced for sellthrough, but live action and adult material is priced for rental,” he said.

“If you are in rentals, you are going to lose customers if you drop VHS,” added Steve Scavelli, president of Flash Distributors.

Revenue-sharing programs with rentailers appeared to be on the decline.

“We're seeing that most retailers, because their cost of goods is so low, are going to buy instead of rev-share,” Bryant said.

Scavelli said he is not enamored with rev-share, opting instead to try to get rentailers to sell previously viewed material after a week or two on the rental shelf.

“This way you take care of early demand, and once you sell the unit, it only costs you about $5 to $8,” he said. “It's an alternative to rev-share that we think is more profitable to rentailers. We talked to studios about maybe promoting that more — making posters and stickers for it.”

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