CHEAP DVDS FIND NICHE IN RETAIL

DAN ALAIMO

TACOMA, Wash. -- Extremely low-priced DVDs are selling well for stores serviced by Video Management Co. here, said Greg Rediske, president.

The public domain titles retail in most stores for $1.99 and lower in a few places, he said. "There's quite a variety of stuff, including some martial arts titles," he said. The cost is around 65 cents each. Among the television and movie titles are: "Bonanza," "Dragnet" and "Gilligan's Island."

"The margins are good, but the cost per unit isn't big. It is definitely a volume based sale," Rediske said. The DVDs are displayed in counter units at the front checkouts and occasionally on the video rack.

"Customers will come in and buy 10 or 15 of them at a time," he said. Video Management has been carrying them since the spring.

"We occasionally get some stores where they don't do very well, but a lot of them are reordering two, three or four shippers," he said.

This is the same product that dollar stores sell for $1, but for many of the 250 stores Video Management services for sell-through product, this isn't a problem, he said.

"For the purposes of what we are doing, this product isn't everywhere and they're not in every dollar store, so it isn't an issue. We sell a lot of them," Rediske said.

"I don't see a particularly long life for this product. It's just one of those promotional things that comes through. It appeals to the new DVD owner -- they want a library and they want it fast. People are buying them, but I think at some point they'll realize they have six of them at home that they never watched. It's a short-term, close-out kind of product line," Rediske said.