EDITED VIDEO BATTLE HEATS UP, ALBERTSONS PULLS OUT

DAN ALAIMO

BOISE, Idaho -- Reacting to a lawsuit filed by the Directors Guild of America, Los Angeles, Albertsons has stopped renting edited versions of R-rated movies.

The test by racker Video II, Sandy, Utah, was run this summer in 45 stores in the Salt Lake City area, and continued into September because of favorable response, according to media reports. Video II had purchased the equipment to edit language and certain scenes from R-rated videotapes to make them acceptable to a family audience, much like the versions shown on airlines and network television, Glenn Dickman, president, Video II, had previously told SN. He did not return calls for comment after the lawsuit was filed. The Directors Guild also did not return SN's calls.

"The film directors object to the editing of this product without their consent, and there has been a lawsuit filed," said Jeannette Duwe, spokeswoman, Albertsons. "We feel that as a retailer serving the entire community, we have to remain neutral in this dispute and, therefore, we will no longer rent these edited videos until there has been a resolution," she said.

Albertsons and Video II had signed an agreement under which Video II assumed all responsibility for the controversial program, Dickman had previously told SN.

"We will continue to have discussions with all the parties involved, and we hope that when the dispute is resolved that an opportunity will arise that enables us to provide a similar product to our customer," Duwe said.

There are a number of retailers in the Salt Lake City area that are involved in the unauthorized editing of movies, including CleanFlicks, Pleasant Grove, Utah. Acting first, CleanFlicks sued the Directors Guild in August to obtain a ruling on its right to edit movies. The Directors Guild filed a countersuit on Sept. 20, naming CleanFlicks, Video II and Trilogy Studios, also in Sandy. Trilogy makes software enabling the editing of movies, as well as allowing consumers to watch DVDs in an edited form without altering the product, said Breck Rice, founder and chief operations officer.

Some studios have experimented with director-approved edited versions of movies, most recently Universal Studios Home Video, Universal City, Calif., with "Josie and the Pussycats," which went from a PG-13 to a PG rating. The only retailer known to carry the title, although it is not an exclusive, is Wal-Mart Stores, Bentonville, Ark., in its Wal-Mart and Sam's Club outlets where it sells for less than $6. The film was initially released to home video on Aug. 14 of last year, and the edited version was quietly released the following November. Sales are doing well, industry sources said.

"We believe in a marketplace solution that responds to consumer demand while respecting fundamental copyright principles, as well as the interests of the many artists and creators whose vision makes the movie unique," said a spokeswoman for Universal Studios.

Industry sources said the studios are seeking the widest video audience for its products and are seeking to provide "all-audience" versions like "Josie," as well as expanded director's-cut editions. This is done on a case-by-case basis -- "there is no formula for it," said one source.

Other industry sources noted that the studios would like to release more approved, edited versions, some trimmed from the R-rating, as requested by many consumers, but the Directors Guild won't let them.

CleanFlicks, which operates nine corporate stores and licenses its name and technology to 67 other independent operators, regards studio-authorized, edited versions as competition, said John Dixon, president. But he also applauds the action. "People don't want to see the sex and nudity, they don't want to see the real gory violence, and they don't want to hear a lot of profanity," he said.

However, CleanFlicks would probably not carry an authorized, studio-edited version. "I don't think they would take out as much as we do," Dixon said.

Craig Hill, video specialist, Harp's Food Stores, Springdale, Ark., does not see demand for such products in his market area. "Unless it is requested, it is not economically feasible in a lot of places, especially in my smaller stores," he said.

Video Software Dealers Association, Encino, Calif., supports the release of authorized movies when authorized by the director and studio. "We hope that all retailers have the opportunity to purchase the authorized versions that are most appropriate for their customers," said Sean Devlin Bersell, spokesman for VSDA.