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Warner Unveils Sellthrough Surprise

7 Jan, 2002 By: Jessica Wolf

Warner Home Video pulls more Swordfish-sized pricing out of its upcoming release pool with Training Day and Heist streeting in March at a sellthrough price on VHS and DVD.

Heist streets March 12 (prebook Feb. 12) priced at $19.96 on VHS and $24.98 on DVD. Training Day streets March 19 (prebook Feb. 19) priced at $22.98 on VHS and $26.98 on DVD.

In a bit of an industry surprise,Warner last October released Swordfish—atypical sellthrough fare—at a sellthrough price on VHS and DVD and the two March releases follow the same trend.

Like Swordfish, both actioners earned less than $100 million in theaters ($ 76.3 million for Training Day and $ 23.5 million for Heist), traditionally the breaking point for ‘A'-title sellthrough pricing. Like Swordfish, both are rated ‘R,' also not typical of sellthrough-bound VHS fare.

Like Swordfish, the two titles feature big name stars, with Danny DeVito and Gene Hackman in Heist and Denzel Washington and Ethan Hawke in Training Day. Washington has also earned Golden Globe and American Film Institute best actor nominations for his ultra-bad-cop role in Training Day.

It's big-name stars and extra publicity that can help drive VHS sellthrough interest in a less than $100 million moneymaker, which may be a reason the studio settled on a sellthrough price for both these titles, says analyst Tom Adams with Adams Media Research. Swordfish was a classic rental title, but it had enough star power that the studio's research showed it could be a viable sellthrough title as well, Adams says. The title went on to earn a healthy $43.4 million in rental revenue, according to Video Store Magazine market research.

Warner executives were unavailable for comment at press time.

New Economics for VHS

Adams says the new economics of the video business may be influencing pricing decisions. Sellthrough pricing could become a trend among studios because "the gap between per-cassette revenue has been shrinking because of the copy-depth programs anyway. It [single VHS unit prices] is already down to the $30 range because of copy depth. As that gap shrinks, it's conceivable that more studios will price non-traditional sellthrough titles at a sellthrough price."

"I think definitely retailers stock up on titles when they can get them cheaper," he adds.

Ted Engen, president of the Video Buyers Group, says he supports any studio that is willing to experiment with pricing in the market and says that Warner's newest move will affect the way video retailers buy the titles.

"Normally in retailers' minds they know how many copies they will need as soon as they see the film and, well, if it comes out at sellthrough it's a gift." Engen says. "They're probably going to spend the same amount, I don't think they'll spend more dollar-wise but it will put more copies on the shelves."

"Testing the Waters

Engen adds he thinks Warner is "testing the waters" with the sellthrough pricing as more and more studios are coming to realize that old goal-based programs are not working the way they used to and new ideas are needed.

Warner's price is good right where it is, both for the VHS and the DVD, he adds.

"Major product should not go under $20," he says. "But I don't like to see it go over $30 either. That $20 to $30 range is the sweet spot. A price range like that…allows us to be profitable and doesn't devalue the product."

Warner is also including on the Training Day VHS a portion of the DVD special features, adding an alternate ending to the cassette. Other DVD special features include a director's commentary, additional scenes and an alternate ending, two music videos and a behind-the-scenes documentary.

Engen says Warner made it clear at its Florida sales conference last summer that though the studio is excited about DVD and the special features options the format entails, Warner is still committed to VHS. He says the added VHS feature on Training Day will be good for rentals and sellthrough.

"If they can put a few more added features in the VHS side, then not only will they attract mass marketers to the VHS, but they will attract customers."

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