CUC readies major online site to sell top titles directly -- CUC
Software plans include leveraging parent company's base of 35
million members
By Kristen Kenedy
Torrance, Calif.-CUC International this summer plans to launch a major online commerce
site, named NetMarket, through which it will sell titles published by its subsidiary CUC
Software, currently the leading entertainment software publisher in retail stores.
CUC International already operates a site under that name (located at www.netmarket.com).
But it has been characterized by the company as more or less a "placeholder" until the new site
is launched.
The move by CUC International is hardly unexpected. More than 35 million consumers
belong to at least one of the $2.4 billion direct marketer's 16 clubs, according to the company.
About 5 percent of CUC Software sales will soon come from direct purchases, either
through NetMarket, Sierra On-Line and Davidson & Associates' Web site or various catalogs,
said Chris McLeod, president and chief executive officer of CUC Software. Sierra On-Line
and Davidson are operated by CUC Software, whose portfolio also includes Blizzard
Entertainment, Knowledge Adventure, Berkeley Systems, Books That Work and a number of
other smaller developers.
That 5 percent is expected to grow as CUC International leverages its direct-marketing
prowess. While retail will always be a key channel for CUC Software, McLeod said loyal
customers of Sierra and Davidson will be contacted directly more often through such
marketing tools as Sierra On-Line's Interact Magazine.
"If the consumer finds [direct shopping] easier, we want to make sure that is an option we are
giving them," said McLeod.
That can be a scary proposition for retailers, however.
"We're not thrilled about it, but I can't say we didn't expect it," said Jerry Medaio, software
buyer for Electronics Boutique. "We've been watching the stepped-up effort on Sierra's Web
site."
Steve Giblin, a software buyer at J&R Computer World, New York, concurred, saying,
"Obviously, it is a concern for us."
Dave Ortiz, entertainment software merchandise manager at Nebraska Furniture's MegaMart,
said, "What they are doing is no different than what all the software vendors will do over
time. All we can do to battle that competition is to make our retail stores as visually pleasing
and exciting as possible."
In addition to the typical online shopping scenario, consumers will be able to play games on
the site, earning points as they go. The points can then be turned in for product discounts.
The preparation of NetMarket comes as CUC Software begins making widespread price
cuts. It expects to complete its price cuts by June, said Todd Coyle, senior vice president of
consumer product. Core edutainment titles will drop to a suggested retail price of $29.99, and
children's entertainment will hit $19.99. Previously, these titles had an average retail price of
$34.99.
Titles such as Hoyle Poker will carry SRPs of $39.99, reduced from about $45. However,
the company's big-budget entertainment titles will still be priced at about $49.99. The lower
prices are designed to aim the titles squarely at the mass market, said Coyle.
Copyright r 1997 CMP Media Inc.
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