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These Retailers Are Game for Used DVDs

6 Aug, 2004 By: Erik Gruenwedel

For Greg Anderson, co-owner of Endless Entertainment, a two-store video game retailer in Erie, Pa., carrying DVD titles was a no brainer since both the Sony PlayStation 2 and Microsoft Xbox systems supported the format.

“It seemed like the next step to go for,” Anderson said. “It is like a natural extension of video games.”

Ditto for Les Litzrack, owner of Video Trading Company (VTC) in Johnson City, Tenn., who now counts a DVD inventory of about 4,000 titles (and 6,000 games) since accepting the format in trades for games and other movies.

“We have been changing our pricing, dropping VHS prices and raising DVD,” Litzrack said. “We're buying more DVD titles off the street than VHS, which we mainly send off to area flea markets to sell four [titles] for $10.”

The two retailers represent a microcosm of traditional video game outlets that has embraced used — not new — DVD titles as both a form of store currency and product offering.

Endless' Anderson said his stores have groups of regular customers that just look for new and used games or previously viewed movies — the latter buyers representing about 20 percent of all customers. “Used DVD titles are just something you can't ignore,” Johnson said.

VTC's Litzrack said his store's customer mix is primarily interested in video games, with the bulk looking to buy previously played material rather than pay full price.

“Most customers are trading video for games, but we allow them to trade either way,” he said. “We allow trades of VHS for games and DVD, but we don't give them as much credit per unit as we do for DVD titles.”

GameStop, the Grapevine, Texas-based video game behemoth with more than 1,600 stores in 49 states, accepts used DVD titles for trade-in credit. With the exception of selected new anime DVD titles — a genre apparently popular enough with gamers to support street date releases — GameStop's lone caveat regarding DVD trades is title availability. “If we have a copy of the title in stock, we can't take it in,” said the manager of a Santa Ana, Calif.-based location. “We did that at the beginning, and we had five copies of Charlie's Angels Full Throttle. They didn't sell.”

With 1,600 stores on four continents and $1 billion in revenue, West Chester, Pa.-based Electronics Boutique finds used DVD sales a nice side business. VP of merchandising Peter Rothmeyer calls the availability of used DVD titles in the company's stores and online a “natural adjacency” to its product base. “There is no rocket science here,” Rothmeyer said. “It's all the same customers using the same product.”

Unlike GameStop, Electronics Boutique briefly dabbled in new DVD releases, but reconsidered after running afoul of an alleged May street date violation on New Line's The Lord of the Rings: The Return of the King (VSM, May 23-29). In a surprise retaliatory move, Warner Home Video suspended all future shipments of product to Electronics Boutique.

Rothmeyer, who called the episode “a complete embarrassment,” said it was never the company's intention to violate the film's street date — a practice he said Electronics Boutique takes seriously on all video game releases.

As a result, the company redirected efforts to used DVD titles. “We are in the trade-in DVD business, but not the new DVD business,” Rothmeyer said.

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