VSDA stands for the Video Software Dealers Association and represents the industry that serves the home video entertainment market. It's a $17 billion market generated by consumers renting and buying videos. As we've seen in other industries, this market is undergoing rapid and fundamental changes. Technology is again a prime change agent but consolidation, mega stores, fierce competition, new consumer desires, variable gross margins and increasing costs are also a large portion of the 1999 home video landscape.
There are approximately 25,000 to 30,000 video rental specialty stores in the United States, including major public chains such as Blockbuster, Hollywood Video and West Coast Video. Another 10,000 to 15,000 non-specialists such as supermarkets and drug stores also rent videos. With these volumes and the importance of video sales and rentals to studios, we are beginning to see new pressures on changing the standard distribution model for mainstream movies and different payment schemes to retailers.
While larger, high-volume retailers enjoyed significant rental revenue increases, many smaller independent retailers suffered from market share shifting. Talking with many of the smaller independents attending VSDA, they are trying to focus more on specialty markets such as adult, related selling and cross media promotions. Some are trying to learn how technology will effect their businesses to find out how they can survive.
e-Real-biz is a new company reinventing itself out of Real Entertainment, a six year venture founded by Scott Barbour, one of the creators of the successful Cops television series. With a new major business partner, Scott plans to position the new organization as an e-commerce portal. This includes a Web site that compiles unedited news footage to new markets using technology. If this system works, it could empower independent suppliers without getting killed by the major studios or big business forces. Are there lessons to be learned from the independent retailers?
All of this has resulted in sharply conflicting ideas within VSDA, especially between the large chains and independents. VSDA chairman, Mark Vrieling, noted some changes need to be made to effectively start addressing these varied situations. Perhaps, the National Video Week in Los Angeles, 1999 is a new start on that process for VSDA and AVN's Adult Entertainment Expo as they are sharing the huge Los Angeles Convention Center to address the needs of their members.
The studios rolled out new product in a wide variety of formats including the recent theatrical hit Austin Powers: The Spy That Shagged Me. New Line Home Video arranged a personal appearance by the crowd pleasing and personable Verne Troyer, aka Mini-Me character, for hundreds of attendees.
Universal Studios Home Video also served up Arnold Vosloo of The Mummy along with Sally Kirkland of EDtv during the convention opening ceremonies.
Playboy Home Video had Heather Kozar, Playmate of the Year, to help promote Playmate of the Year: The '90s.
Sterling Home Video promoted Modern Vampires and Protector II with Casper Van Dein and Mario Van Peebles respectively. Questar Video had Sherry Belafonte promote Travels in Mexico and the Caribbean.
Respected international director, Werner Herzog, graciously represented Anchor Bay Entertainment and his classic film Fritzcarraldo which is in released video and DVD formats.
Paramount Home Video announced a special promotion of The Complete Collection of Indiana Jones which has been digitally re-mastered, it's shown in wide-screen format and includes 12 feature length videos from the television series.
Fox Home Video is also promoting an Arnold Schwarzenegger special action five pack VHS series for $65 including hits such as Terminator 1&2 and True Lies.
Warner Bros. also launched the Wizard of Oz in VHS and DVD formats for a limited time.
Columbia Tri Star Home Video announced it's second direct to video release The Nuttiest Nutcracker featuring dancing nuts with a marketing tie in with Blue Diamond Almonds. Chow Yun-Fat and Mark Wahlberg's The Corruptor is being released with special DVD features including the making of the film, commentary from the director James Foley, music soundtrack and etc.
Four days of seminars and conferences presented everything from strategy development to debt collection and loss prevention. The sessions were well attended with people looking for real answers to real business questions.
"DVD and The Filmmaker" was one of the most entertaining and informative sessions of the entire conference. Host Leonard Maltin lead an outstanding panel of film directors, who provided some new insights into how DVD is also winning the hearts and attention of some of the film industries most high-profile and respected directors.
Panelists included Robert Altman, classical director of MASH, Gods and Monsters, Bill Condon, Antz, Eric Darnell, Nosferatu director Werner Herzog, and Rush Hour director, Brett Ratner.
DVD is now being seriously considered when the directors frame their scenes for the theatrical release. Out takes and director commentaries are frequently added to the DVD release because customers are demanding it. The realization that more people will see a film on video, as opposed to the theater, is also having a significant impact on how these films are being produced. The quality of a re-mastered or original digital production provides long-term quality replay and enhanced sound capabilities for the viewer.
The director's vision and efforts are also preserved by DVD's superior playback and extended capabilities. Brett Ratner candidly admitted laserdisc helped him learn his directors trade and is now using DVD technology to cleanup images and remove imperfections in current productions. The re-purposing of rough drafts, story boards, directors comments and etc. can be used to enhance the final DVD release for film enthusiasts. Finally, vintage footage and classic releases can be improved by digitizing, audio track improvements and surround sound.
All of these developments will change the face of the theatrical and home entertainment markets. While some changes may be painful, they will in the long-term improve the industry. This is especially true if all sectors can work together. Future VSDA conferences will hopefully served as a sounding board and spring board so everyone can better participate in a fascinating entertainment industry.
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© 1999 Jim Bennett All rights reserved.
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