ST. LOUIS -- Sight & Sound Distributors here will support its new DVD program with store-specific market research.
The Smart Start program, which starts this week, begins with a demographic study done by the video distributor and a customer survey, said John Fetto, territory manager in the Kansas City, Kan., branch. "We want to make sure that retailers have a potential customer base of DVD users; that they are not just guessing," said Fetto.
"We don't want anybody to put money into a product line that is not going to be successful for them. We want to make sure that the income level and the education level of their market can support the category," he said.
There is a $20 fee for the demographic study, but it is credited back with the retailer's initial DVD purchase. The results of the study are cross referenced with a demographic profile of average DVD users to show how strong a market base the retailer has for DVD.
Sight & Sound will also make DVD hardware units available on a revenue-sharing basis from New Century Multimedia Group in Seattle. Retailers pay $50 per machine and share 70% of the revenues with New Century, but with no liability while the machines are out on rental. New Century also provides technical support, said Doug Hogenson, president. "There needs to be a rental program for DVD to succeed."
This answers the need of many retailers who would like to offer DVD hardware for rental, but don't like the costs of buying and maintaining the equipment, said Fetto.
The Sight & Sound program also does not require retailers to buy freestanding display racks, he noted. "Everyone else is out there trying to sell racks, trying to sell TVs, trying to sell players. But that is a $3,000 investment for retailers. We don't want to do that."
The future looks bright for supermarkets and DVD, Fetto said. "DVD is going to give supermarkets the opportunity to own the rental world if studios remain where they are in terms of pricing. If DVDs continue to cost less than $25, with rental tapes costing over $70, supermarkets are going to be able to bring in more titles than they currently have and buy more depth of copy. That means they are going to satisfy more of the thousands of customers coming through their front door, which they can't do today."