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Studios Get Graded in Buying Group Report

2 Jan, 2004 By: Erik Gruenwedel

Concern over clandestine home video pricing purportedly offered by some major studios to mass merchants, limited distribution options, and exclusives to select retailers were among several issues raised last week in the New England Buying Group's third annual 2003 industry report card.

“I do feel strongly … that [of all] the items addressed … mass merchant pricing and exclusives will only get worse in 2004,” said Todd Zaganiacz, president of the New England Buyers Group.

The grading, which evaluated the studios' retailer, pricing and procedural programs -- including for the first time revenue-sharing (RS) and product accessibility (PA) on VHS and DVD -- was assessed based on data compiled over the course of the year from the buying group's 70 store members throughout the Northeast, Texas, Florida and Virginia.

Due to the group's primary reliance and apparent satisfaction with three distributors -- Baker & Taylor, Ingram Entertainment and Rentrak -- distribution was not graded in the report.

Home entertainment studios receiving grades included Artisan, Buena Vista, Columbia TriStar, HBO, Lions Gate, MGM, New Line, Paramount, 20th Century Fox, Universal Studios and DreamWorks, and Warner Bros.

Box scores, with notes from the report, follow (in alphabetical order):

VHS: A “Dropped price, making it more feasible to bring in titles in depth.”
DVD: A “Multipacks continue to be lucrative. Pricing on expansive special editions is solid as well.”
RS: A “Covers both DVD and VHS.”
PA: A “New-release and catalog consistently accessible.”

Buena Vista
VHS: B+ “Pricing is on the high side. Reuse of old tapes as new stock … creating defects, quicker wear and, most importantly, customer concerns [that] the product is bootlegged.”
DVD: A “Should be commended for excellent TV product packaging with individual sleeves.”
RS: B+ “Lower upfront fees and quicker selloff terms would garner a top rating.”
PA: A “Easy access from multiple venues.”

Columbia TriStar
VHS: F “Forces retailers into unreasonable programs. Increased titles premiering on cable have left retailers discontented.”
DVD: B “Appreciate packaging widescreen and full-screen together. Cannot give ‘A' until product continually being placed on cable … is rescinded.”
RS: F “Only major studio not available through Rentrak. If goal is to penalize independent retailers or make product increasingly unattractive or unaffordable to them, [Columbia TriStar] is succeeding.”
PA: F “Limiting access to product through select distribution was a crashing failure, impacting consumers as well as retailers in a disastrous manner.”

Lions Gate (Studio/Trimark)
RS: A- “Selloff terms for titles are in need of revamping. Box office titles not included in output deal.”

VHS: B “Pricing is off target given current state of VHS demand.”
DVD: A+ “The attention to detail and restoration is commendable and continues to make product a desirable and lucrative commodity.”
RS: A+ “Model is one of the best.”

DVD: A “Should be commended for rental sleeves on boxed sets.”
RS: B “Terms were somewhat out of line at start of year; selloff dates are still out to lunch.”

20th Century Fox
VHS: C- “Remains one of the highest-price studios.”
DVD: A “Commended for wealth of TV product; thin-pack cases with rental sleeves. Good show!”
RS: C+ “Selloff pricing on DVD is high; terms on VHS/DVD are delayed too long.”
PA: A “Most accessible of all studios for product.”

Universal Studios/DreamWorks
VHS: C “Showed little change with exception of fourth-quarter sellthrough product.”
DVD: A “When you offer rental sleeves for boxed sets, please make sure they exist.”
RS: C- “VHS-only output deal exists; upfront fees are high and selloff dates are still out to sea.”
PA: D “If not for the ongoing availability of Canadian product, this grade would have been a stern ‘F.' When designated distributors are so quickly out of stock of heavily promoted titles (Scarface), ... increasing amounts of money are being left on the table with no solution in sight.”

Warner Bros. (related entities HBO and New Line follow)
DVD: B “Their grading will never reach ‘A' status until the snapper case is put on moratorium.”
RS: A-
PA: D “The restrictive access to all lines is a failure and continues to negatively impact business across the board.”

DVD: A “Got rid of the snapper case … we applaud you.”
RS: A+
PA: D (see Warner Bros.)

New Line
DVD: A “Thank you for ensuring this season's ‘Lord of the Rings' editions were not as troublesome as the 2002 editions.”
RS: A+
PA: D (see HBO)

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