Time-Warner is getting cold "DVD" feet. E-Town News.........................
WARNER'S DVD WARNING
Without support, the studio will limit DVD to 7 cities
by Bob Gerson
TUCSON, March 21, 1997 -- Speaking at a meeting of the International Tape Association this week, John Powers, Warner Home Video market director, indicated his company will not expand its DVD software distribution beyond the seven initial cities without assurances of substantial support for the other major Hollywood studios.
Powers added that Warner will only continue to work in the seven cities "to the degree that it is economical," implying that if software sellthrough doesn't take off quickly, and other studios -- including Disney, Fox, Paramount and Universal -- continue to take a wait-and-see attitude, Warner will abandon the DVD format.
Powers' remarks expanded upon similar comments last week from Warren Lieberfarb, Warner Home Video president, during the National Association of Record Merchants (NARM). Lieberfarb cautioned attendees that Warner would not go it alone indefinitely in DVD software marketing.
Warner delivered up to 34 DVD titles to merchants in Chicago, Dallas, Los Angeles, New York, San Francisco, Seattle and Washington D.C. on March 24.
Powers said the window for success is narrowing, with building "competition from the sky," referring to Rupert Murdoch's recent decision to merge his ASkyB satellite service with EchoStar.
Others executives with stakes in the DVD market attending the ITA meeting showed little concern. Mike Fidler, Sony DVD marketing department VP, said "Warner has its own policy. Columbia TriStar still intends to roll out nationally."
Larry Pesce, Thomson DVD product management manager, said "We have begun shipping product to the seven markets, but no other locations at this time. We are tying our distribution closely to software availability."
As for promotional support, Thomson will not bundle DVD software discs with its players. Instead, purchasers will be given a coupon for two free titles from the Warner/MGM catalog. "How fast we move out of that is yet to be determined," Pesce added.
RCA is also not planning to supply a floor merchandising kiosk as it has for DSS equipment. Instead, Pesce said, dealers requested a set-top display merchandiser. "The DSS kiosks got a little dog-eared after the first six to eight months," he quipped.
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