Despite Warner Rental Direct program, title surpasses expectations

Despite the retaliatory efforts by some wholesale video distributors to hurt sales of Warner Home Video’s “Romeo Must Die,” the title not only met retail order expectations but also topped the VHS and DVD rental charts and the DVD sales chart in its first week in video stores.

The movie that grossed $56 million at the box office performed disproportionately well in stores last week, with $7.42 million in rental fees on more than 2.1 million VHS rentals, according to the VSDA VidTrac.

It also generated more than $1 million in revenue on 280,000 DVD rentals. Its next closest competitor, Fox’s “The Beach,” drew more than $615,000 in its second week in stores.

Warner also shipped more than 500,000 DVD units of the title as sales of the DVD version exceeded all others during the week ended Aug. 6, according to the exclusive national sales charts of Daily Variety sister publication Video Business. It was also the top-ranked DVD seller last week at retailers such as Best Buy, Amazon.com, Tower Records, Blockbuster, Hollywood Video and Express.com.

Many angry

Several of the few remaining video wholesalers had cut back on orders of “Romeo Must Die,” with at least one major distributor ordering just 60% of Warner’s target goal for the distributor on the title.

Many traditional wholesalers are angry because Warner is cutting them out of the loop on rental titles beginning Sept. 1. That’s when Warner’s new Rental Direct program kicks in, which sets up a revenue-sharing program for retailers to work directly with Warner and a single wholesaler, Ingram Entertainment.

Distributors and even some retailers had openly talked about boycotting the remaining titles distributed by Warner under the old program. But even though orders from some distribs came in unusually low on “Romeo Must Die” and some New Line titles distributed by Warner, the effort apparently had little impact, with Warner claiming to have reached 98% of its order target of about 279,000 units. Counting all forms of revenue-sharing and direct accounts, Warner shipped 650,000-750,000 units into the market, according to industry sources.

Picture has changed

The fact that the efforts of the distributors had little effect is an indication of how much the video distribution picture has changed in the past couple of years. Warner reaches about 57% of the retail market through its own direct accounts, including Blockbuster and Hollywood, and another 20% through Ingram.

So studios can easily make up any shortfalls, for whatever reason, by a few traditional regional wholesalers, which represent just a fraction of the remaining 23% of the retail base.

Bigger orders by other wholesalers and Warner’s direct accounts easily made up the shortfalls by those wholesalers who came up short.

Warner had done well with its other bigger hits like “The Green Mile” and “The Whole Nine Yards” this summer, strong titles for which distributors could not afford to take a stand that would hurt themselves as much as Warner.

Line in the sand

But they made their position clear on “Romeo Must Die” and some New Line titles distributed by Warner in July and August, which also came in well short of sales goals.

Although VHS orders are coming up short across the board this summer, wholesalers were targeting Warner-distributed titles specifically to make a point about their unhappiness with Warner’s new program.

“They are doing that, especially with secondary titles,” said one studio executive. “They want to spank them.”

But the spanking turned out to be more like a slap on the wrist barely felt by Warner.

Retail VHS orders of “Romeo Must Die” exceeded those of other movies with similar box office, such as “Deuce Bigalow,” which had orders of about 248,000 units after a box office gross of $65 million, and “Bicentennial Man,” which had B.O. of $58 million.

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