U.K. video distributors are to launch a generic promotional campaign Feb. 20, aimed at staunching the loss of business at the nation’s 6,000 specialist videostores. After 10 years of expansion, the £ 550 million ($1.1 billion) video rental business in the U.K. has reached a plateau.
Distribs say that last year was one of zero growth and this year could see a downturn. They have pledged £ 10 million ($19 million) to the 10-month campaign, which will focus on tv advertising.
Meanwhile, the U.K. sellthrough business, now worth about £ 360 million ($684 million) a year, continues to thrive. Figures from the Christmas sales period show that three leading titles, “Ghostbusters II” from RCA/Columbia and “Lady And The Tramp” and “Pretty Woman” from Buena Vista, more than met distribs’ expectations.
“Ghostbusters II” had only a six-month rental window before being packaged with the original “Ghostbusters” in a limited edition, two-in-one gift pack retailing at £ 14.99 ($28.50). The entire 150,000 run was sold out to the trade on the day of release. RCA/Columbia will rerelease the film in sell-through as a regular, single-title cassette, with a £ 9.99 ($19) ticket, at Easter. Per RCA/Col’s sell-through chief Frank Brunger, the company expects to move a further 100,000 units.
The sell-through release of “Pretty Woman” caused a stir in the trade as the title had no previous rental window at all. Common view was that it would have been a sure-fire rental winner. However, Buena Vista decided that it could maximize returns by hitting the Christmas sale market while the theatrical success of the pic was still fresh in peoples’ minds. Result was more than 800,000 cassettes sold in the three-week Christmas sale period.
Beating them both, however, was classic title “Lady And The Tramp,” which cleared a massive 1.3 million cassettes in the three months leading up to the holiday.
The vid rental campaign is the brainchild of Kees Zwaard, managing director of RCA/Columbia Home Video. Zwaard headed a similar, and successful, initiative in the Netherlands. Drafted as fulltime campaign coordinator is Paul Ayscough, a former ad industry exec.
Campaign will feature 88 new video releases between March and the end of December. The first five will be “She’s Out Of Control,” released by 20:20 Vision; “Communion,” released by First Independent Films; “Days Of Thunder” and “Die Hard 2,” released by CBS/Fox; and “Dick Tracy,” released by Buena Vista.
These will be jointly advertised in a manner that stresses the intrinsic merits of video renting. With an eye to competition from BSkyB movie channels, ads may highlight the film titles being released on video before they appear on satellite tv.
However, distributors have launched the campaign without the active involvement of vidstore owners. Both sides agree that the U.K. market is far from saturated – only 28% of VCR owners are regular renters of vid cassettes – and both agree that an all-industry generic campaign is the answer to stagnation. But long drawn-out talks between the two sides on a proposed joint operation eventually came to nought.
Distribs say the proposed means of funding the retailers’ contribution to the campaign – a £ 1 levy on all pre-recorded cassettes – was unworkable. Retailers counter by saying that distribs were never keen to have them on board. “I don’t think they want to share control with us,” comments Video Trade Assn. chairman Derek Mann.
And vidstore owners say they fear the initiative could backfire. Per Mann, danger is that the stores will not have enough stock to meet raised expectations of consumers.
Low levels of stock in vidstores has been a major problem since last summer, when recession came home to retailers. As income dried up, most simply cut down on acquisitions. Problem is that a narrow selection of movies and a lack of stock-depth for popular titles is a big turnoff for would-be customers. The slowdown in business can thus quickly become a self-fulfilling downward spiral.
However, distribs have not offered easier sale terms or discounts to ensure in-depth stocking even of those titles featured in the ad campaign.
Another concern of vidstore owners is that, by opting for a mostly title-led campaign, distribs are merely transferring resources from their regular marketing and promotion budget to the generic campaign.
Campaign chief Ayscough declined to discuss these, or other, points in detail, saying that all would be revealed when the campaign is officially launched next month.