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TK's MORNING BUZZ: Hollywood's Same-Store Gains and Blockbuster's Savvy Promotions Are Signs of Good Health for Home Entertainment

2 Oct, 2001 By: Thomas K. Arnold

Yesterday was a big news day for home entertainment, and for once most of what came across the wire was positive.

Amid a flurry of bad financial news -- including earnings warnings, masslayoffs and more and more economists predicting we're going to be in a recession -- Hollywood Entertainment came through with an 11% gain insame-store sales during the third quarter, significantly higher than the targeted 4% to 5%.

Blockbuster Inc., continuing its wise diversification strategy, announced acopromotion with the NFL and DirecTV for the 2002 Pro Bowl. Big Blue is setting up interactive kiosks at most of its domestic stores, where customers can vote for players to be on the all-star teams. The kiosks will be up Oct. 15 through Dec. 2; as part of the promotion, customers who buy DirecTVsystems from Blockbuster between Oct. 15 and Nov. 15 (and activate programming by Dec. 3) will be entered in a sweepstakes for a trip to the Pro Bowl in Hawaii.

The third bit of interesting news is that General Motors will offer factory-installed DVD entertainment systems in all its mid-size vans: theChevrolet Venture, the Pontiac Montana and the Oldsmobile Silhouette. Thepress release announcing the move says GM plans on "raising the standard forfamily travel."

There's more. The savvy executives of Blockbuster, determined to make up forlost time with DVD -- and in an unexpected break from their recent "renting isbetter" mantra -- have teamed with GM on the carmaker's "Drive Out, Play On" promotion.

Any customer who buys a GM entertainment van gets either a home DVD player from Samsung or a $100 Blockbuster GiftCard "to help them build their current DVD library," according to the press release.

Let's boil these news nuggets down into a general statement of health. We've got one big video rental chain reporting huge gains in same-store sales, and another big rental chain casting for dollars in another industry it believesis complementary to its core business. Then we've got GM, about as American a company as apple pie, giving DVD a decided vote of confidence -- and launching a promotion in which one of the two video rental chains is actively involved.

The world may be a crazy, and changed, place, but our little corner seems better off than ever.

Comments? Contact TK directly at:TKArnold@aol.com

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