Video Retailers Debate Pros And Cons Of Copy Depth

LOS ANGELES-At a research seminar during National Video Week here this month, John Nucifora, owner of Chimney's Video Superstore, told video retailers and distributors in the audience that he had done well renting and selling "Saving Private Ryan," a major hit at the box office and on home video. What helped was that he was able to stock 80 copies of the title in his store.
Trouble was, the Blockbuster Video store down the street had 575 copies of that particular video.
Therein lay the problem that many video retailers complained about during the three-day conference July 8-10 in Los Angeles. Despite their best efforts to meet consumer demand for hit titles by adopting revenue sharing and other copy-depth programs, they were finding it difficult to compete with Blockbuster and Hollywood Video, which, because of their size, can cut the best copy-depth deals with the movie studios.
Retailers were told that the best way to combat the mammoth chains was to band together into buying groups whose clout with studios could rival that of Blockbuster and Hollywood.
But many retailers and distributors seemed skeptical about such groups and confused by the number of alternatives presented to them.
In addition, many video retailers maintained their basic ambivalence about revenue sharing as a business model for their stores. Although this strategy can cut their buying cost per title from $65 wholesale to less than $10, many seem loathe to share profits with studios or with revenue-sharing distributors like Rentrak.
However, the Video Software Dealers Assn. (VSDA) made a presentation of research showing that revenue sharing may be the savior of the industry (Billboard, July 24).
The Mars & Co. report, based on a survey of members and on Rentrak's 2,400-plus-store database, concluded that the average video store could increase its sales by 8% if it doubled the copies of each hit title it stocked. Moreover, the total video retail industry could grow by $300 million over the next three years if revenue sharing were widely adopted.
VSDA director of research Robert Liuag said that the organization was looking to undertake another study, this time for a full year rather than six months, and to include all titles.
The current research has been taken to the movie studios to "educate them about the impact of their programs on the independent retailer," said Liuag.
Nonetheless, the retailers, especially the independents, maintained that their suppliers weren't favorably disposed to offer them good deals.
"The studios are not convinced you're going to buy significantly more copies if they reduce the price," said Rich Thorward of videoretailer.com, a buying collective.
"Studios are asking