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Universal Pulls Out of VSDA Convention

5 May, 2003 By: Joan Villa

Universal Studios Home Video will not participate in the annual Video Software Dealers Association's home entertainment convention this July, Video Store Magazine has learned.The studio issued a statement indicating it can best reach its customers through “direct, customized interaction” rather than through the convention route of suites, floorspace and event sponsorship.

“While VSDA remains an integral part of our industry, Universal Studios Home Video's overall strategic plans are diverging from those served by VSDA's annual convention and are more appropriately served by more direct, customized interaction with its membership,” the studio said through a spokeswoman.

Sources said the studio may even decide to pull its membership in the organization.

VSDA chairman Tom Warren, in Los Angeles for studio meetings this week, said, “I feel certain the door's open” on membership renewal. “We have an ongoing dialogue with Universal and all other VSDA members about the value of their ongoing VSDA membership.”

He intended to meet with Universal executives this week, but scheduling conflicts prevented a meeting. In studio meetings generally held each quarter, Warren said Universal and other studios emphasized the importance of the VSDA's research and legislative efforts.

“People always want to know why should I spend $100,000 on a cocktail party when I'm not going to sell them another copy of a movie, but that's something they have to decide; that's nothing wrong with VSDA,” he said. This year's convention is “ahead of target projections” and nearly all of the suites have been sold, he added.

Warren declined to provide the annual dues that Universal pays to the association, which he says are based on a percentage of sales and cannot be disclosed. Overall, however, studios, distributors and public chains pay nearly $1 million in annual dues to the VSDA, he said.

A source familiar with the situation said Universal's dues alone amount to nearly $300,000.

“Other studios are now reviewing their status, and this could be the death knell for VSDA,” he warned.

Studios' ”standard answer” for withdrawing support is “they don't see how the money they put in VSDA is benefiting them,” he added. “The real answer is VSDA has screwed up” by not staying in touch with studios' changing needs and providing meaningful benefits that would justify the expense, he said.

Studios won't discuss their relationship with the VSDA, but privately they do question the expense of being involved with a trade group that many regard as increasingly irrelevant.

One major studio executive who expects his company to support the show said he nonetheless must “always” re-evaluate whether it's worth attending the VSDA show in light of the costs.

“The whole business has changed,” he said. “The question is, who are the retailers that are attending? They don't exist. There used to be 15,000 and now there's 1,000, so what's the point?”

A second major studio executive said his company, too, would participate at the convention, but more out of habit than the belief that the VSDA is doing an effective job of drawing its retailer base to the show.

“There are relationships and symbolic values, and who wants to be the first to pull out?” the executive said. “But many of us feel VSDA is ineffectual.”

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