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Subscriptions and Next-Gen DVD Concern Retail

11 Jun, 2004 By: Erik Gruenwedel

Citing a need to further explore how a subscription service would affect Movie Gallery's business model, EVP Bo Loyd said the costs appear to outweigh the benefits of marketing the concept to its largely rural customer base.

“My concern is that it is a discount to your best customers,” said Loyd.

He said the monthly subscription rates offered by competitors such as Blockbuster and Netflix exceed what his customers will pay.

Movie Gallery does offer discounts to customers who prepay for video and game rentals, he said.

Loyd — whose comments came during a video retailers' executive session at the Third Annual Home Entertainment Summit: DVD Lucky 7 — also said industry scuttlebutt about the next-generation DVD format has his attention if copy-protection issues can be addressed.

Ted Sarandos, chief content officer of Netflix, said consumers who understand the benefits of high-definition DVD “won't look back” at the current format, and retailers who ignore technological advances will lose out.

“There is a big risk on the retailer side of missing the curve,” Sarandos said.

Noah Herschman, VP of strategic business development and new technologies with Tweeter Home Entertainment, a retailer of advanced consumer entertainment products, said the early adopters of hi-def DVD will step up demand for high-definition TV content.

As an example, Herschman said Tweeter sold 2,000 HD satellite receivers at $1,000 each within the first three weeks on the market.

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