CHOICES

John Karolefski

MCA/Universal Home Video already had "Jurassic Park" to romp across the fourth quarter with Disney's "Snow White and the Seven Dwarfs." So when studio executives were deciding when to release "The Flintstones," they could have chosen the first quarter of 1995. Better to stand alone than fight a crowd, right? Wrong. "The Flintstones" will be released Nov. 8 at a sell-through price of $19.98. Fred and Barney will join an impressive cast of characters in what's shaping up as a festive holiday season. They will collectively produce the best fourth quarter ever in home video sales. Before we go a-wassailing, however, there are a few nagging questions about this amount of product. Is it too much of a good thing for consumers in a short period of time? Can the trade handle so many titles effectively? The answer to the first question is simple: The number of sell-through hits in the fourth quarter will equal whatever the market will bear. As long as sales continue to increase every year, the dance floor will get more crowded. This escalation will cease -- or at least be re-evaluated -- once sales stumble. Until that happens, the fundamental things apply: Too much is better than too little, and give customers what they want. At the annual convention of the Video Software Dealers Association in Las Vegas in July, Louis Feola, president of MCA/Universal Home Video, put this issue into focus for Supermarket News: "For under $50, think of the value of owning 'The Flintstones,' 'Jurassic Park' and 'Snow White.' As a consumer, I can't think of another item that you can purchase for under $50 that would bring that kind of value and enjoyment to a family."

An argument could be advanced, however, that Hollywood is lavishing too much on consumers in a short period because they now have other choices of exciting entertainment product: video games, audio books, CDs and computer software of growing sophistication. Something has to give. Frankly, with better than 80% VCR penetration, along with the wealth of fourth-quarter titles, the scale seems to be tipped in favor of buying home video this holiday season. May the better form of entertainment win. Retailers, of course, figure into this cornucopia of entertainment. Many supermarkets now offer a lot more than video, so they also must make choices about how much they buy. The choice depends on the strategy of each retailer, and regional consumer preference. In the final analysis, retailers have to put their money where they will get the best return on investment. A bigger concern for retailers is margin erosion on fourth-quarter hits because of loss-leader pricing by mass merchandisers. Supermarket video operators interviewed for this special supplement on the fourth quarter have chosen to take an aggressive stance (see Page 4). Their pricing will be sharper than in the past. Thus armed, they will leverage traffic and convenience to boost sales. This strategy was best described by Tim Harrison, video supervisor at Food Giant Supermarkets: "The margins are slim, but just having the customer in the store is half the battle. If we can keep them walking into our stores rather than into Blockbuster or Wal-Mart, then just leave the rest to me."

Happy holidays!