To: BillyG who wrote (27103 ) 12/26/1997 2:45:00 PM From: John Rieman Read Replies (1) | Respond to of 50808
Blockbuster Drops the ball...........................................................ijumpstart.com DVD Rentals Make Gains in Asia while U.S. Efforts Stall: Toshiba, Matsushita Forge Partnership with Japanese Retailer <Picture><Picture><Picture> DVD content vendors could have an easier time getting a return on their investment thanks to a software rental program underway in Japan, but the outlook in the United States isn't as bright. Japan-based retailer Culture Convenience Club Co. Ltd. (CCC) began renting DVD titles at two stores in Tokyo last week through an initiative with Toshiba Corp. and Matsushita Electric Industrial Co. Ltd. Meanwhile, in the United States the rental program Blockbuster Entertainment Inc. [BBEC] and Sony Electronics Inc. launched in April is still in a test phase and has not moved beyond seven major markets. Last week CCC's Tsutaya video and CD chain began renting DVD titles at the company's two major stores in Tokyo. CCC expects to offer rentals at 10 stores early next year, including branches near Osaka, and plans to introduce the program nationally at its 940 stores with 200 to 300 titles in the spring of 1998. Toshiba and Matsushita have invested approximately $2.3 million dollars each in CCC's subsidiary Culture Publishers Inc. (CPI), which owns the rights to an extensive film library, giving each company a 19.9 percent stake in the company. In addition to taking a stake in CPI, the manufacturing giants will provide support for DVD authoring, encoding and mastering to help CP convert its video properties to DVD. CP might also rent DVD-ROM games in the future because the company is expanding into areas of digital publishing beyond film. Blockbuster Drops the Ball? The rental initiative in Japan comes on the heels of a program in the United States between Sony and Blockbuster that is not yet in full swing. In April, the companies joined forces and began renting DVD-Video titles at 40 Blockbuster stores in the top seven markets where DVD hardware launched initially. Blockbuster increased the number of storefronts to 150 in July, which represents less than 5 percent of the company's 3,900 stores, but has yet to move the rental program beyond the initial seven markets. Blockbuster officials who spoke with Multimedia Week said the rental program is still in a test phase and would not say when or if they will expand it to additional locations. Michael Fidler, Sony vice president of DVD marketing, told MMW lack of movement on the DVD rental front is largely due to changes at Blockbuster that have taken place since January the company moved its headquarters from Florida to Dallas. Jonathan Baskin, the Blockbuster executive heading up the DVD rental program left the company in October, company officials confirmed. "Based on what they've publicly disclosed, they were really trying to redirect anything that was not focused on their core business," Fidler said. "We're still in touch with them and we're waiting for them to move forward." Blockbuster rents video games, so it's conceivable that once the number of DVD-ROM titles becomes significant the company will offer them for rent. (Blockbuster, 214/854-3000; Culture Convenience Club, 81/354-241-937; Culture Publishers, 81/354-241-620; Sony, 201/930-1000.)