So much attention has been given to increased copy depth for rental of new releases lately that few in the video industry have questioned the need for it.
Retailers said they've had to increase copy depth, but they don't necessarily think it's a good thing for them. Competition from the video specialty stores has forced the issue.
"You don't want people to come in and find that all the copies of hit titles are gone, because they will go to the competition and get it there," said Laura Fisher, video coordinator/merchandising associate at Martin's Super Markets, South Bend, Ind. "If we want to rent videos, we have to participate in copy depth, whether we have the space or not. It's not a choice anymore," she said.
Copy depth has "really devalued video in a lot of ways," said Bob Gettner, video buyer/coordinator for B&R Stores, Lincoln, Neb. "It has definitely changed the renting habits of the consumer."
"To be competitive, you have to put enough copies on the shelf for the customer to perceive that you are the place to go for video," said Darlene Kiefer, services coordinator at Seaway Food Town, Maumee, Ohio.
Bill Glaseman, video specialist for Bashas' Markets, Chandler, Ariz., takes a contrarian view. Many of Bashas' video customers continue to be loyal despite modest increases in copy depth, he said. "We try to accommodate people as much as possible. They seem to enjoy being in our store, they like the video department's convenience and maybe they don't even think about going elsewhere. I'm sure some do; I know they do. But it's surprising how many people seem to be willing to wait until the movie that they want is available," he said.
Here is what the roundtable participants had to say about copy depth:
SN: "Copy depth" has become the video industry's mantra. But how important is copy depth?
KIEFER: We need enough copies to keep the customers from getting frustrated, but we still have to be able to make the return on investment on those tapes.
FISHER: Copy depth is important on the A-titles, but not so important on the B-titles, because for us a couple of copies of a B-title are plenty. On the A-titles, it goes back to the competition -- you go there and it is guaranteed and so on. You don't want people to come in and find that all the copies of hit titles are gone, because they will go to the competition and get it there. If we want to rent videos, we have to participate in copy depth, whether we have the space or not. It's not a choice anymore.
GLASEMAN: Copy depth is really not very workable in stores with limited space. Our departments are not large. We try to increase copies of the very top potential renters, but that means adding one, two or three copies of each title to each department. I recognize that this is hardly a true copy-depth allotment, but that is all the additional space and budget that is available to us. So we can't really compete with the large quantities of the big specialty stores. Besides that, increasing copies forces us to stock only the very best box-office titles and I have to ignore most of the sub-A's and certainly the B-titles. It forces me to buy fewer titles and not give enough spread to our customers. Even with the slightly increased number of copies, we seem to enjoy strong customer loyalty -- they keep coming back. They seem to be satisfied to wait a few days to obtain the video that they want to view.
SN: Is that due to the convenience factor?
GLASEMAN: I think so. We try to accommodate people as much as possible. They seem to enjoy being in our store, they like the video-department's convenience and maybe they don't even think about going elsewhere. I'm sure some do; I know they do. But it's surprising how many people seem to be willing to wait until the movie that they want is available. It might sound unrealistic, but that really is happening.
Copy depth also means that there are many unwanted copies that are either returned to the studios from the leasing programs, or that sell off very early in a new release's life cycle. I'm sure there is a very rapid burn-out and reduction of actual rental turns per copy. The studios are going to get tired of unwanted copies backing up in warehouses, and they are going to do something about it eventually. Every week when I read my mail there are new deals of the week that show up. After more than a year of unrealistic promotions, studios seem still to be trying to perfect their last failed deal.
I understand the studios are readjusting their programs to accommodate supermarkets. I haven't seen it yet, but it just seems studios are constantly re-evaluating what they are doing. I still feel a single price would resolve all these problems.
GETTNER: Copy depth used to be a pretty big issue. But it's been exploited so much that the consumer knows that if they really want something, they can find it. Consumers used to know that if they came in, it might be out and they'd have to come back and try again. But with the big guys having 100 to 150 copies of titles, that's not the case anymore. The customers don't have to come back, let alone pick up another title. If they go in with their mind set on getting one title. It's really devalued video in a lot of ways. It has definitely changed the renting habits of the consumer.
SN: How has it changed your buying practices?
GETTNER: Buying has gotten harder and harder, with less revenue coming in because of the copy-depth programs and the competition. And as our piece of the pie shrinks, we buy a little bit less.
SN: How much copy depth is enough given the limited space of supermarkets?
KIEFER: It depends, it's title by title. We go by the box office; the bigger the box office, the more copies you want to bring in, because that indicates it is a popular movie. But you have to be careful with that too. Then, of course, what we pay for the movie determines how many we can put on the shelf.
FISHER: We limit our big purchases to the best movies. We have to, given the limited space we have. For example, on "Titanic," we brought in about 30 copies per store and that is a lot for our departments because of the wall space it takes up, especially with the double-tape.
GETTNER: I don't think there's a single answer to how much is enough, because there's never enough, even if one of the big competitors brought in 150 copies, even that may not be enough of certain titles. But, for example, taking a rental title that made over $100 million at the box office, on average we would buy between 10 and 12 copies per store, and that would probably be all that we could afford. Recently, we've decreased that number to between nine and 11 because of increasing costs and lower revenues.
SN: Has this caused you to look into the revenue-sharing programs either from Rentrak or distributors?
GETTNER: I've been called more than once from Rentrak but, from the very beginning, I've never been a supporter of revenue sharing. I found that it is just not possible because of space constraints -- we don't have the space to store 150 copies of a title sometimes and provide the consumer with a breadth of choice, and we're just not used to sharing our revenue in the grocery business. When we buy something, we own it, or we turn around and sell it.
SN: Are expanded rental periods, like Hollywood Video's five-day rentals, a viable option for supermarkets?
GLASEMAN: Absolutely not. Again, think in terms of the size of our departments. For us to offer five-day rentals, we would have to have at least five times as many copies of a title as we are now carrying. It is impossible for us to do that. I also think it is stupid. In five days everybody on the block can watch the same movie for the same rental cost. We offer two-day rentals in some places, and we run into situations where we want a customer to return a movie, and they say, "My neighbor has it."
SN: Is a lot of that happening?
GLASEMAN: It would have to be. I just don't see the sense of it. I don't think that is going to last.
KIEFER: It really goes against the whole reason that Seaway Food Town got into videos to begin with. They got into it, first of all, because they saw it as a way of making customers happy. But secondly, it is a way of getting customers to come back into the store for a second visit when they return the video.