Product variations feed different consumers

Could first- and second-class DVDs help increase sales?

That’s the hope of 20th Century Fox Home Entertainment, which has told its accounts that it plans to launch a DVD program that creates two classes of discs. One is a premium retail version that contains added-values such as digital copy; the second is a stripped-down version for rentals.

According to a letter sent by Fox senior VP of sales Don Jeffries and obtained by Video Business, the strategy starts with March 31 releases of “Marley and Me” and Best Picture Oscar winner “Slumdog Millionaire.”

“Slumdog’s” rental DVD, for instance, carries only the movie and trailers. The retail version also has special features including deleted scenes and commentaries. And while the rental Blu-ray does have the bonus features, only the retail Blu-ray adds digital copy.

The configurations vary by title. “Marley & Me,” for example, has special features on both the retail and rental DVDs. The “Marley” Blu-ray also carries bonus features, but the retail Blu-ray is a combo pack with a DVD movie and digital copy.

Other titles initially covered by the new strategy are “Day the Earth Stood Still,” due in stores April 7; “The Wrestler” and “Notorious” on April 21; and “Bride Wars” on April 28.

Fox confirmed the strategy in a statement, but did not provide details.

“We have developed product variations to feed different consumer consumption models and behaviors,” the statement said. “For rental customers, we’re delivering a theatrical experience in the home while promoting upcoming releases; for retail [or sell-through] customers, we’re offering a premium product that expands the entertainment experience of that particular property to further enhance ownership.”

Whatever Fox’s intentions may be, its ability to enforce those terms is limited by the First Sale Doctrine, which gives retailers the right to rent any legally purchased copies. Rental stores, for example, can go to Wal-Mart and buy the premium versions, then rent them to consumers.

“There’s no question that some rentailers will go and buy from Wal-Mart and rent out the copies, and you can’t stop that,” said Ted Engen, president of 1,800 store cooperative Video Buyers Group. “But it’s not going to be that big of an issue as people think. The main thing is that studios have to add value to get customers to buy and they aren’t buying. Numbers have been falling through the floor.”

Susanne Ault is a senior reporter at Variety sister publication Video Business.

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