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VSDA Announces New Directors, 'Common Practices' Survey Results

18 Jun, 2001 By: Hive News

The Video Software Dealers Association (VSDA) has three new directors on board for three-year terms.

The new directors are Adrian Hickman, TLA Entertainment Group, Philadelphia,Penn.; Nick Novakovich, That's Entertainment, St. Catharine's, Ontario,Canada; and Martha Vance Sims, Vance Cinema Rentals, Laurel, Miss.

"We are very pleased to add these three excellent retailers to the board," said VSDA chairman Tom Warren. "The diversity of backgrounds and experiencethey bring to the board will enhance the ability of the board to serve our industry and our membership, and particularly the independent retailer."

These new directors will formally assume their positions following the Julyboard meeting, scheduled for July 12 and 13 in Orlando Fla., during the VSDA's annual Regional Leaders Conference.

The trio bested candidates Doug Aita, Tape King, Bozeman, Mont.; HalseyBlake-Scott, Charlottesville, Va.; Ken Dorrance, The Video Station, Alameda, Calif.; RossFlint, Video Station Superstore, Taylor, Texas; and Dave Stevenson, BigPicture Video, Liverpool, NY. All ballots received by the June 15, 2001 official deadline were tabulated by Grant Thornton, LLP, an independent accounting firm.

VSDA has also announced that results of its "Common Practice" member survey,designed to show trends in video retailers' purchasing practices.

Among the revelations in the survey, it indicates that 10% of respondents do not participate in either revenue-sharing or studio copy-depth programs, and those that don'tpay on average 10% more per title.

The study also shows that respondents are spending 20% of their total movie budgets on DVD product.

"In conducting this study, we wanted to take a closer look at a video retailer's product mix and costs and build upon some key information gleanedpreviously by our 2000 Benchmarking Study," said Mark Fisher, VSDA's vp of membership. "The 2000 VSDA Benchmarking Study found that a primary difference between the most profitable retailers and the average was in their gross margin."

A few of the common practices identified in the survey are:

* Most retailers budget their VHS retail purchases (86%). More retailers establish a monthly fixed-dollar budget than budget based on a percentage of projected revenues.

* The average retailer reports spending 37.4% of total VHS rental revenue on VHS rental purchases annually.

* Less than half of responding retailers (39%) participate in revenue-sharing and 84% are participating in programs.

* More than 10% of respondents do not participate in either revenuesharing or programs, buying all of their VHS rental product at standard price.

* There is a 10% cost differential between the average tape cost for a retailer not participating in either revenue-sharing or programs and a retailer participating in both purchasing options.

* DVD accounts for an average of 20% of the dollars spent on rental movies purchased by respondents. However, fewer than half of the survey respondents purchase DVD rental product based on a budget. Many made comments that their DVD budget is growing each month.

* The average retailer reports spending 34.9% of total DVD rental revenue on new DVD purchases annually. Their average cost of a DVD is$19.45, and they spend $10 on DVD for every $40 spent on VHS product.

* Six percent of respondents purchase their DVD either from online retailers or from brick-and-mortar retailers. Fifteen percent of responding retailers purchase their video games in this fashion.

* Only a third of respondents develop a budget for video games. A few retailers made comments that it was difficult to budget for video games because of the ever-changing release schedule.

VSDA's monthly "Common Practice" reports are a recent effort to help videoretailers share business ideas and solutions. The practices identified inVSDA's "Common Practice" reports are collected by on-line retail membershipsurveys conducted monthly and focus on specific areas of retail operation.

A copy of the full results from VSDA's latest common practices study is available free to members online at www.vsda.org.

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