A&E BETS ON LOW PRICES TO BUILD INTEREST

ANNE SHERBER

NEW YORK -- Special-interest video, documentaries in particular, has never been a very active category for supermarket video departments. Shoppers attracted to A-titles have shown little interest in buying or renting truth-based programming from supermarkets.

But at least one company is making an aggressive attempt to change that. According to Tom Heyman, vice president of new media at A&E Home Video here, supermarket shoppers are as likely to buy what he calls "intelligent, thoughtful programs on interesting people" as shoppers in any other retail channel if other factors, including price, display and promotion, are correctly adjusted.

A&E has made significant progress in bringing high-end special-interest video programming to a wide audience. But the company, Heyman said, had come to suspect there were many outlets, notably retailers like mass merchants and supermarket chains specializing in sell-through product, that it was not servicing as effectively as it might.

It was that suspicion, Heyman added, that prompted the company recently to launch several initiatives designed to capture sales in those outlets that are extremely price-sensitive and have historically passed up A&E's product.

First among A&E's new sales programs is the Blue Chips Collection, which was created based on feedback the company received indicating the boxed video sets for which it is best known carried too high a price point.

"Box sets have been our trademark in the business," said Heyman. "We have heard quite clearly those outlets, including groceries, that say, 'We love your products but they're too expensive.' "

The Blue Chips collection includes seven of A&E's catalog of boxed sets, Heyman said, including "CIA: The Secret Files," "Crusades," "Locomotion: The Amazing World of Trains" and "The Best of Lovejoy Mysteries." These sets have been temporarily repriced from $79.95 and up to $39.95 for the fourth quarter.

"The idea is to make quality product accessible for a limited but important period of time."

Heyman acknowledged that most chains believe even $39.95 is too high a price point. But, he insisted, during the fourth-quarter gift-giving season, when consumers are even more pressed for time than usual, price can take a backseat to convenience.

"If I see a great gift while I'm in a supermarket, I've killed two birds with one stone," he said.

A&E has also started marketing a line of low-priced audio cassettes based on the company's popular "Biography" television and video series. The eight tapes in the audio line retail for $9.95 each, Heyman said, adding that the company plans to make a wide selection of product available with regular new releases. The price point is evidence of the company's interest in and responsiveness to supermarkets, chains and mass merchants, Heyman noted.

"We could have gone out at a higher price and could have still had all the bookstores on board," he said. "But we really wanted to cast a wide net with this line and make it friendly to a lot of our retail customers."

Heyman said the company intends to make the audio line even more supermarket-friendly by creating displays. "We're working on ideas for early next year. We're very interested in working with customers to design the most effective displays possible."

Another new addition to the A&E product line that Heyman believes is a good fit for the supermarket channel is the company's first foray into the "instant publishing" genre.

Eight days after the death of Mother Theresa, the company released the commemorative "Mother Theresa: A Life of Devotion." Heyman said the product is ideal for supermarkets because of its immediacy and the peak of demand.

Although the product is priced at $19.95, the high end of sell-through, Heyman noted that mass merchants and supermarkets have had success with other similarly priced A&E product.

" 'Emma' is a good example of successful video product priced at $19.95. It's highly recognizable and chain stores of all kinds, including supermarkets, present it as a sell-through or as a high ROI rental product."