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U.K. Dealers Fight Two-Tiered Pricing With Web Site

6 Jun, 2003 By: Jessica Wolf

In an effort to fight the tiered-pricing trend developing in the United Kingdom, a small coalition of U.K. independent retailers has formed the group Video Independents Protecting Rental (VIPR).

VIPR was created by Charles and Christine Conway of The Video Store in Wrexham, England; Andy Waterman of Wyke Video Centre in Bradford; and David Turnidge of Capricorn Video in Essex.

The group has created a Web site where independent retailers can get information on the little they can do to respond to the past year's shift in pricing from studios like Warner, 20th Century Fox and, for one title -- Die Another Day -- MGM. Tiered pricing requires rental dealers to pay a premium price for titles that are released simultaneously into the sellthrough market at a lower cost for sellthrough retailers.

“By forming VIPR, we hope to give independent video dealers a voice in lobbying the government for changes in the law which currently allows Warner Home Video and Fox Pathe Home Entertainment to impose dual pricing on the industry,” the organization posted on its site.

At www.vipr.org.uk, retailers can download form letters and send them to their Member of Parliament, the European Parliament, the British Office of Fair Trading and England's Department of Culture, Media and Sport.

All the letters outline the new programs and cite the fact that Warner tried to institute a tiered-pricing strategy in Australia that was shot down in that country's courts and that the First Sale Doctrine prohibits the strategy in the United States.

The letters state that more studios could follow Warner and Fox's lead and, in effect, change the country's market by eliminating rental altogether, which would be detrimental to consumers and could put smaller retailers out of business. The letters also address the fact that big chains like Blockbuster and Choices Video have negotiated revenue-sharing deals under new pricing terms, which helps keep them competitive with sellthrough retailers.

Jim Cardwell, president of Warner Home Video, said revenue-sharing may be the best option in a tiered-pricing market.

“We believe in revenue-sharing as a way to manage copy depth and keep consumers satisfied and coming into stores,” he said.

VIPR also has a dedicated forum at U.K. retailer site Movie Zone's discussion boards (www.moviezone.co.uk).

In postings on the Movie Zone message board, VIPR members admit they have no real funds or even significant clout to help out independents like Bill Best, owner of Star Video in south London, whom Warner has taken to court for having sellthrough copies of Ocean's Eleven and Training Day in his store. The most VIPR can do at this point is offer “support and advice” to Best, who is representing himself in England's High Court, a VIPR poster wrote. Though his case has been postponed until later this month, Best has already been ordered to pay £1,500 ($2,444) to Warner, according to reports.

In other tiered-pricing news, some rental dealers in the United Kingdom mistakenly received sellthrough-labeled copies of MGM's Die Another Day -- for which the studio has instituted a tiered-pricing strategy in the U.K. -- instead of the rental-version copies they had ordered. An MGM spokesperson told View Magazine that rental dealers who got the wrong order could rent out the copies to their customers and would not be prosecuted, but also said the supplier would work to rectify the problem if and when it repeats the strategy with future releases, and will enforce the tiered policy.

Additional reporting by Thomas K. Arnold.

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