Supermarket reaction has been mixed on the incentive programs offered to increase copy depth on hit rental titles from Warner Home Video, Burbank, Calif., and Columbia TriStar Home Video, Culver City, Calif.
Warner was the first studio to roll out its "Profit Plus" program, doing so late last year. It rewards retailers with free copies if they meet certain order requirements. Columbia TriStar and Universal Studios Home Video, Universal City, Calif., and Disney's Buena Vista Home Entertainment, Burbank, Calif., have followed with other copy-depth programs.
Matt Feinstein, vice president of Marbles Entertainment, Los Angeles, which has 20 leased-space video departments in Vons and Lucky stores, is enthusiastic about the programs. Feinstein said that he met Warner's goals for the first three Profit Plus programs, thereby receiving the additional free product, and he plans to meet the goals set by Columbia TriStar.
"The goals are accessible," said Feinstein. "They're really nothing out of the ordinary for us. We might get a couple of B-titles that we wouldn't have normally purchased. But we're buying those instead of B-titles from another studio."
The additional goods will enable Marbles to offer consumers guaranteed rentals on "I Know What You Did Last Summer," said Feinstein. In Marbles' stores, if consumers do not find a copy of the promoted title, they receive any rental in the store for free during that visit. Prior to the Columbia and Warner programs, he offered guaranteed rentals only on titles he purchased through shared-transaction fee distributor Rentrak Corp., Portland, Ore.
Feinstein's satisfaction was echoed by Gail Norrick, the video manager at Scott's Food Stores, Fort Wayne, Ind. Scott's has purchased the Warner Profit Plus titles at levels high enough to qualify for free goods, she said. During the program's first wave, Warner refused to take back defective products, but in subsequent waves, the studio has made it possible for retailers to return faulty products directly to Warner Home Video by calling an 800 number. Warner also requires retailers who are returning defectives to pay a $10 handling fee.
Warner has refined the program in two other ways: retailer and distributor input. Although the first group of Profit Plus goals was tied to a retailer's purchase of a single title, Robert Palmer's "Addicted to Love," retailers complained that it punished them for overbuying on the title. In the second, third and in the upcoming fourth waves, goals are tied to a retailer's average purchase of several titles.
The titles in the fourth cluster, all of which will street next month, will be "L.A. Confidential," "Red Corner," "Don King: Only in America" and "Breaking Up." According to Jeff Brown, director of rental marketing at Warner Home Video, a key feature of the program is the heavy post-street date advertising that the studio is committed to doing on each of the Profit Plus titles.
But not all retailer concerns have been addressed. To some supermarket buyers, the bonus-unit programs are downright unfriendly. "In my opinion, these programs are an attempt by the studios to move B-product. The goals aren't reasonable," said Larry Bigelow, owner of Brooklyn Park, Minn.-based Video Consultants, which buys videos for the 17-store Erickson's Diversified, Hudson, Wis.
Bigelow said that by using SuperComm, Dallas, Erickson's can "buy what it wants; what we feel the markets can handle." Although Bigelow said Erickson's does buy some secondary titles, he can't justify the quantities Columbia would require to achieve his goal. He also resents being forced to buy titles that he doesn't believe will do well in his stores. "For instance, I liked 'The Assignment.' I would have put one copy in each store. But that wouldn't have fulfilled Columbia's requirement."
Bigelow also noted that to participate in the Columbia promotion, some titles of which don't street until April, he would have had to have placed his orders by Feb. 17.
One video buyer for a 25-store supermarket chain, who asked to remain anonymous, said he was pleased with the Warner and Columbia programs in general because they reduced his cost per copy, though he did complain that they both made it difficult to shop for the best deal on a title-by-title basis.
Because retailers have to demonstrate how many units they purchased of the titles the studio is tying to the goals, he believes his choice in distributors is limited. "You're tied into whichever distributor you bought [those titles on which the studios based their goals] from, unless you want to show a new distributor an invoice from an old distributor," he said.