Warner in talks with Blockbuster rivals to jumpstart DVD............................
newline.com
WARNER OFFERS REVENUE-SHARING PLAN TO BLOCKBUSTER RIVALS
(by Brett Sporich and Betsy Scala)
Warner Home Video, soon after beginning a revenue-sharing test with Blockbuster Entertainment, is offering similar deals to retail rivals Movie Gallery and Moovies, and it's believed that Warner executives are making the rounds of the industry's largest chains, including Hollywood Entertainment, West Coast and Video Update.
Meanwhile, Viacom chairman Sumner Redstone told analysts during a conference call to discuss third-quarter results that the chain has nailed down revenue-sharing agreements with several studios. He did not elaborate, other than to say they will put more copies of hit movies into Blockbuster stores at a lower cost. Under the revenue-sharing test, Blockbuster will buy most copies of a given Warner title at its regular price of about $65 and an incremental number for $3 each. Rental revenue for all copies would be shared by the retailer and supplier after 34 turns (VB, 10/27).
Executives from other chains that have discussed revenue-sharing with Warner said their interest was piqued but the deal did not seem as sweet as the one offered to Blockbuster. An executive at one chain said that, to qualify for revenue-sharing, his company would first have to pay full price for all the units it would typically buy on a given title, meeting Warner's unit sales "goal" for the account, before it could buy incremental units for a nominal fee. Meanwhile, because Blockbuster is in the process of cutting unit orders on most titles, it appears that the nation's largest chain might not be held to such a goal.
Warner executives were unavailable for comment. |
