INGLES BOOSTS VIDEO GAME RENTALS WITH REVENUE-SHARING

Dan Alaimo

ASHEVILLE, N.C. -- Ingles Markets here is using a shared-revenue program to boost its presence in the video game rental business.

"It's had a big impact on the copy depth," said Harold Grogan, Ingles' video director, of the program from Rentrak Corp., Portland, Ore.

Ingles began using the program earlier this year and increased its copy depth from one or two copies of a major game title to eight, depending on store size, Grogan said. The move to eight games came about three months ago, he said.

"The games are picking up all the time," Grogan said. "Because we have copy depth on games now, the customers know they can come into our stores and find these games," he said. "Video games haven't been that profitable and possibly this will turn that around."

Rentrak's game program is similar to its system for movies, where retailers acquire software copies for about a $10 up front fee and then share about half the revenues with Rentrak on a "Pay-Per-Transaction" basis.

"The basic premise of Rentrak is risk management," said Andrew Miller, director, of Rentrak's supermarket division. This is well suited to the game business where such long-established predictors of how a title will perform, like box office, are non-existent, and with a cost in the $40s, the games are expensive compared to DVD movies, he said.

"It enables retailers that are limping along in the video game business to make a statement, obtain some copy depth with a low risk and a potentially high reward, and satisfy more customers," Miller said. Ingles, he said, is "moving aggressively with our game program. He just wants to see what is going to happen and the early numbers are really encouraging."

The Rentrak program has been improving as time goes on, signing up more game publishers, Grogran said. "They've got some great titles coming up now. Each month it is getting better and better, Grogan said.

Prior to the Rentrak program, "games were not a big part of our business. But ever since we went with Rentrak's revenue-sharing program, it's becoming a greater part of the business. So I see this trend continuing for a long time," Grogan said.

Ingles continues to have a strong commitment to video rental, as well as sell-through, he said. "Every time we open a store, it has a store-within-a-store video rental department in it."