Norwalk Distributors Inc.: Devoted To Dvd

Norwalk Distributors has carved a unique niche for itself in the DVD-Video distribution business by focusing on catalog titles and stellar customer service. As DVDs continue to pick up steam amongst customers, the company is poised to expand its video offerings 100% and build new relationships with more studios and retailers in the coming years.

GROWING APPEAL

Norwalk's foray into the video business began about 12 years ago, in the era of laserdiscs. Kim Campbell, the company's VP, says that 90% of its customers wanted the one-stop to begin carrying the discs at the time the format debuted. Norwalk had never distributed VHS tapes, however, because the market had already been oversaturated with one-stops.

When DVDs were introduced in 1997, Campbell says, Norwalk was "immediately on board. There were very few companies initially distributing DVDs. When studios started advertising the format on television, with a full, supportive campaign behind it, that really brought our customers to the format. Many of the laser stores we worked with transferred to DVD, and many audio stores also began carrying DVDs."

From the outset, Norwalk's goal was to carry as many DVD titles as possible. It built DVD relationships with major companies such as Twentieth Century Fox Home Entertainment, Buena Vista Home Entertainment and Paramount Home Entertainment, as well as with independents such as Artisan Home Entertainment, Anchor Bay Entertainment and Image Entertainment. The company currently works with more than 100 studios.

Norwalk also carries approximately 25,000 individual DVD titles and has a separate building completely devoted to its DVD stock. This is one of the factors that separates Norwalk from other distributors. As Campbell says, "We are one of the only one-stops or distributors that fully carries everything."

By stocking a variety of DVD product, Norwalk has been able to appeal to a growing client base of independent retailers. "Our retailers can't compete against the big boys. What they do is fill their customers' needs in other ways," Campbell explains. "Consumers may buy The Lion King from Best Buy or Costco, but they are going to buy catalog from other stores."

Thus, Norwalk carries a variety of DVD categories such as horror, musicals and TV boxed sets to help position its clients in the marketplace.

KEPT WELL-STOCKED

Among the company's best-sellers on DVD are such diverse titles as Donnie Darko (Fox), Mallrats (Universal Studios Home Video), Straw Dogs (Criterion), A Chorus Line (MGM Home Entertainment) and boxed sets of The Simpsons (Fox). Norwalk also carries top theatrical hits and Campbell says that big sells are typically in the 2,000 to 10,000 copy range.

"Our relationship with Norwalk has been very positive," says Steve Bicksler, owner of the Pasadena, Calif.-based Penny Lane store. "Their fill has been very good, compared to a lot of other suppliers. They go pretty deep on catalog, and our customers really like the oddball movies and the independent films. We can rely on Norwalk to get these types of DVDs to us."

For retailers, there are a number of advantages to working with Norwalk. Due to the company's on-site stock of DVDs, retailers can receive last- minute orders quickly, since products are shipped out six days a week. "We have shipping, depending on where you are, that can go overnight," Campbell says. "In California, we can take orders till up to 5 o'clock at night and still get them there the next day."

Additionally, Norwalk keeps individual titles available, no matter how they are selling. Campbell says that even if only one copy of a title sells every six months, the company will continue to carry it in order to satisfy its customers.

The company offers multi-structured discounts to retailers as well, instead of the typical flat-rate structure of other one-stops.

Further, Norwalk sends out a weekly DVD mailer to more than 1,500 of its retail clients via e-mail or regular mail. The mailer includes a synopsis of each new film that is available, details about the project's stars, its year of release, running time and rating.

Retailers can easily fax back an order list based on the mailer and can look at an order list online at the com-pany's Web site, norwalkdist. com. A special "A" list form, which includes only the expected big sellers, is also available.

Norwalk also keeps in mind upcoming holidays when stocking DVDs. For example, it was sure to have black

history-oriented titles available prior to February, and also had Easter-appropriate titles available prior to that holiday.

A CONFIDENT FUTURE

Looking ahead, Campbell says that Norwalk should be doubling its DVD business and adding another building strictly to house its DVD stock. She is extremely positive about DVD's potential because, she says, it is a much different medium than audio product. "Audio comes and goes very fast," she says. "With a lot of these DVDs, you have a window that just stays open because it is constantly selling."

However, she is concerned about three issues: pricing, high-definition DVD and a DVD-rental model. She sees incremental price drops from the studios as good for business, though she hopes that this will not change when a high-definition format is introduced. "I think the studios are moving in the right direction with high-definition," Campbell notes. "I don't think they will come into it and try to overprice them to where they are not affordable."

For Norwalk, the fact that DVDs were introduced as day-and-date rental/sell-through products has proven invaluable. However, any changes back to the VHS policy—which saw tapes released solely as rentals first—could be problematic. "To flip flop would be tragic," Campbell says. "That would be a huge concern to us, because we've never dealt with rental."

Campbell is confident that, despite these issues, Norwalk is ready to become an even bigger player in the DVD business. "Thanks to all of our clients, our account base has grown by word-of-mouth," she says. "People are claiming their territory with DVD niche product, which will continue to be our focus."