WALT DISNEY ACQUIRES SUPERCOMM

DAN ALAIMO Additional reporting: MICHAEL SLEZAK

BURBANK, Calif. -- In a move that will shake up the video distribution business and fuel more growth for supermarket video rentals, Walt Disney Co. has bought shared-revenue distributor SuperComm, Dallas. SuperComm is a video supplier that has built its business almost exclusively on supermarket accounts. It provides new-release movies on a pay-per-rental, shared-revenue basis, which allows retailers to stock much greater quantities of hits and minimize their risk on less successful titles. While other video programs for supermarkets have been slow to develop, SuperComm has been embraced relatively quickly by retailers since it was started in March 1992. The company now has 24 supermarket retailer accounts and 1,211 individual stores. Among the chains known to be using the SuperComm system are Randalls, Pathmark, Safeway, Winn-Dixie, King Soopers, Fleming Cos., Price Chopper, Dillon's, Fiesta Mart and Nash Finch Co. "This is a monster opportunity to increase consumer transactions in the rental business," said Ann Daly, president of Buena Vista Home Video. SuperComm will be a separate subsidiary of Walt Disney Co., although it will report into Buena Vista, Disney's video sales, marketing and distribution arm, she said. Daly would not reveal how much Disney paid for SuperComm, but the price was less than $10 million, according to press reports. SuperComm founder Jack Silverman will continue to be involved with the company on a consulting basis while operating his other firm, Supercenter Entertainment Departments, formerly known as Cevaxs U.S. Des Walsh, SuperComm's vice president and general manager, will continue in that role. Buena Vista hopes all supermarkets that want to acquire rental titles through revenue-sharing will use SuperComm, Daly said. Products for specialty retailers will go through Rentrak Corp., Portland, Ore., a company Disney established an equity relationship with last summer. Disney's hallmark marketing clout will help SuperComm gain acceptance. "We think we can manage its growth in a way that retailers are going to respond to. We see it as a real shot in the arm for the rental business in supermarkets," Daly said. Since the shared-revenue system makes more copies available in high-traffic supermarkets, this will get many consumers back into the habit of renting videos, Walsh said. This will benefit the entire video industry. "More than anything, the acquisition indicates the ability that the SuperComm revenue-sharing program has demonstrated to grow the video rental business for participating retailers," he said. What happens next with studio participation in shared-revenue programs is a question. "I would like to partner with one other major supplier, one that is committed to promoting their rental releases to the consumer, so we can provide retailers with a good option," Daly said. The acquisition may be bad news for Rentrak, said Dick Kelly, president of Cambridge Associates, Stamford, Conn., a consulting firm. "My prediction is that Disney will grow this beyond the supermarket world." But Ron Berger, Rentrak's chairman, said Disney's move validates a concept he has been working for many years to establish. "Disney's bold stroke confirms Rentrak's long-held belief that copy depth and breadth, at levels unachievable except through this pay-per-transaction system, represent the best way our industry can grow," he said. Traditional video distributors have so far resisted shared-revenue programs.