While retailers struggle with the VHS pricing programs offered by movie studios, they also continue to look ahead to the possibility that DVDs could be repriced for rental.
"It's been rumored for quite some time, and in my opinion it wouldn't surprise me," said Bob Gettner, video buyer and coordinator, B&R Stores, Lincoln, Neb. "DVD has just exploded in the marketplace, although if they do something like that now, it would upset a lot of people."
Unlike VHS titles, DVD movies have always been priced relatively cheaply to encourage sell-through. Studios usually price VHS tapes prohibitively high -- over $100 for the most popular titles -- to allow a window for rental before they lower the prices for sell-through.
Dallas-based video rental chain Blockbuster reportedly supports such a pricing structure for the DVD format because it would allow the chain to earn rental revenues on DVDs before they become available for sale. A Blockbuster official was not available for comment.
Studios might be reluctant to make any changes at this point, however.
"There is lots of talk, but we don't have any plans here," said Robert Wittenberg, executive vice president of sales and marketing at Metro-Goldwyn-Mayer Home Entertainment, Santa Monica, Calif. "We're going to stay the course, at least for the near term. The format was introduced at a sell-through price, and it's been that way. We don't want to kill the goose."
Michael Gold, senior research engineer at SRI Consulting Business Intelligence, Menlo Park, Calif., said he thinks some major studios are still seriously considering a shift to two-tier pricing, however.
"If the industry goes ahead with two-tier pricing, it's a real capitulation to Blockbuster and Hollywood Video, and a major setback to the plan for studios to rely more on supermarkets, general merchandise retailers and the like to sell DVDs," he said.
He said consumers could be resentful if they suddenly had to wait until after a rental period was over in order to buy DVDs. "I have a feeling there's going to be significant audience resistance," he said.
