OWENSBORO, Ky. -- The National Association of Video Distributors here has issued a statement critical of the many and varied buying programs being promulgated by the major studios to increase copy depth at retail.
These include such strategies as bonus goods, free goods, leased goods, buybacks and revenue sharing.
The distributors said they are primarily concerned with the extra costs they have incurred as a result of these programs, but they also recognize the strain the situation places on retailers, said Bill Burton, executive director of the NAVD, based here.
"We think it is a terrible burden on the retailers. As difficult as it is for our salespeople to absorb these programs and explain them, it is equally difficult for the retailer to understand them and sort them out. It's like going to a buffet that has too many choices -- you end up with nothing or just vanilla," he said.
This is especially true for supermarkets in the video rental business, Burton added.
"In my opinion, and based on my experience, supermarkets are used to having as much of a hands-off involvement with the supplier as possible. Video is a little bit unique anyway in that the successful supermarkets have to commit a little more labor and a little more management to run that department. When you've got something that is outside their normal operating practices and you throw in all this other confusion, I could see where it could be very frustrating for supermarkets," he said.
The NAVD statement, which came out of an Aug. 12 board meeting in Chicago, said, "The topic of greatest concern and that generated the most lengthy discussion is the impact on the industry and the extra costs distribution is being forced to incur to implement and execute the varied and constantly changing studio programs. The impact is monumental and far-reaching. There are direct quantifiable cost increases related to freight, phone and wages."
The statement went on to note the stress borne by distributors' sales personnel.
"The timeliness, disruptions and confusion make it very difficult to sell effectively. NAVD is exploring ways to quantify these increased costs and document the damaging impact these myriad programs are having, not only on distribution but on the entire industry. Distributors will be taking their case directly to the studios."
At its November board meeting in Los Angeles, when distribution executives sit down one-on-one with the studios, NAVD plans to present its case, said Burton.
The programs, which vary from studio to studio and from release to release, have "created a great deal of confusion, turmoil and uncertainty in the industry," he said. NAVD would like to see the studios settle on one or two consistent promotional models, he said.
