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Panelists Discuss Wal-Mart's Clout, Price Dilemma

2 Oct, 2003 By: Holly J. Wagner

Wal-Mart has DVD clout, a panel of home video executives agreed.

“We will release certain products if they say they are interested in them and not release certain products if they are not,” said George Feltenstein, SVP of classic catalog at Warner Home Video, at last week's Digital Hollywood conference in Hollywood, Calif. Warner is video “category captain” for the giant retailer. “They don't run our lives, they don't run our business. But they are very important to our business,” he said.

Wal-Mart also drives decisions like formatting on some titles. While early adopters wanted widescreen, the Wal-Mart customer wants full-screen, said Peter Staddon, SVP of marketing at Fox Home Entertainment.

“Wal-Mart is critical to the DVD business,” said Alex Carloss, SVP of domestic marketing at MGM Home Entertainment Group. “Their priorities are everyday low prices so the current new-release business is not exactly their favorite subject. The Best Buys and Circuit Citys of the world are advertising great new releases in circulars below cost as loss leaders to sell their big televisions. Wal-Mart has to match those and then, based on their slogan of everyday low prices, they kind of have to keep it there,” he said.

“That said, they have more foot traffic than, basically, Europe,” he added. “They are not necessarily going to make money on new releases so you have to complement that with the TV product, the library product that is out there. That lifts that basket ring [purchase size], and it adds profit margin where they are not necessarily getting it.”

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