David,, I want to thank you from bottom of my heart..thanx to you I am up $9,000 on RENT from last night .. as I am sure many others who jumped in ...
Excuse my OCR
1st article
Last spri.ng, with Bloc@mtersg Profits under @train and management in tilr@il, Mr. Rodatorn trade the rounds of Hollywood studios, asking for price concessions on tapes. Otherwise, he argued, Slockbuster's Problems would inevitably work their way bac;c up the industry food c:hain.-Stud-Lo executives initially scoffed at Mr. Redstone, but the past year's weak results have evidently @ooned their minds.
what Blockbuster does has loud repercussions in the video ind4atry. The chain commands almost 30% of the video retail market. lea next-largest competitor,
Hollywood Entertai.nment Corp , has a market share of about St, according to ax% industry trade group- The other retail players are minftll*r chains and @opendent stores.
one party that stands to benefit from the distribution shift is Rentrak Corp. ik Poztland, Ore., video distributor that has been operating a revenue-ohering program for the past 2D years. Blockbuster recently signed a multiyear pact with the company, whom* proprietary information system records each and every rental at its clients, stores and acto as the oo-between for them wi t h the studios. In exchange, Remtrak gets lok of rentil revenues, with the stores and studios getting 49* each.
Ron Berger. Rentrak's chairman and chief executive, says the studios, old
videopric@ng,sygeom puts an "artificial uapll on the rental I;usinamn. "We could grow the Dusiness at 20t to 30t if we remove the constraints on the number of tapes in the marketplace." he says,
@ It's far from clear whether merely stroking mare videotape& can b*dL back the 2 rowing Interest consumers are @wing in direct-matellit 11 services. more than mix million households now subscribe to direct satellite service*. skimmir.9 off formerly 4t,,.id video renters.
"we have not been @o.the video *tore mine* we cot the syntem,h may* David Hynes, owner of a min@ll insurance company in Bloomington, Minn., who signed up for General Motors Corp.la DireaLTV service last year.
It all adds 4jp to a lot more advertising for videos from both studios and retailers. Iletro- -M,,V,!r Inc. is increasin ad spending for new
'a .I:4,!:!IlwyT,
v'deo-rent a by news= th4U4 4VI " 440 MYlion. Most bigger att&dios a.7so are weighing sharp spending increases.
Sony Corp-la C61umbia Tris-ar @e video unit in developing a pilot va=siqn of a Sunday supplement, similar to a newspaper In weekly television guide, to highlight apooming release&. Meanwhile, Blockbuster is advertising heavily, too, with its new slogan, ItGo Home Happy.11
Bruce @all contributed to this article. (gND) DOW CONES URNS 03-25-ta 00:.17 AM
I
2nd article
News Retrieval in OXPORD3.GWS Kar 25 gu;35 Page: i
RZNT I ool/oo7
00:04 WS WS*J: Blockbuster Seek@ A New Deal with Hollywood
By Ebon SrmpirQ
Staff Reporter of The Wall Street 6Tournal
Tonight thousands of movie tans will head to their local video store to pick
up a cWy of @^4x Force One.,' but chances are, quite a few of them will hazre
to settle'for "Shanghai 8,@rite,"
Everyone knows video stores don't stock enough copies of hot-new released. It should be an easy problem to fix, but it isn't. Now, the nation's largest video chain, Viacom Znc.'s Blockbuster, and the Hollywood studios that supply it are overhauling the wav thev do business to mmrrmnt- a flaw t-hzt ham Al@mady taker. a O@IQIAO toll.
Ending years of @abbli-ng, Blockbuster and the studios are moving toward a new distribution method known an "revenue shaving.0 it has the potential to trigger a vast uhift in the ecor%omico of Follywood and the video b-asirtmes.
Here is how the old system workedt Studio* sold videotapes, through a distributor, t@ Blockbuster and many other retailers for $gS such. The shares would r nt the tapse as many times ax they could and keep all the proceeds. But at ;65 a pop, it cast a lot to keep up with the burst of demand for each new video release.
Under revenue sharing, stores got videotape& from studios through a middlemen for a mere BE each, and then return a portion of the rental revenue back to the studios. The stores' lower initial investment should allow them to stock far more copies of hot titles and, in theory, satisfy a vast unmet demand. The studios, in turn, are betting they,ll make up on volume what they give up on v,-doo prices. Depending on the deal, stores can opt to sell used ta themselves or return them to studios.
A lot is at stoke for Hollywood movie studios, where video rentals and sa7es, a $10 billion business. have become the single greatest source at revenue. Last year, rental% slipped 3%, while sales to consumers plunged sk, according to Alexander & Associates Inc., a Now York research firm.
Some consumers are being wooed away from video by direct-to-home satellite services, which offer vast seloq@ione of movies. But many more people are just fed up with video stores, thin inventory of hot releases, people in the industry concede.
Itihere used to @ a notion in this business that * litt'.e dissatisfaction is OK,,, SAYAD Michael Johnson, president of Walt Disney co,,a hug* suona 'Vista home video operations. Disney began using the rovenue-sharingr model with Blockbuster earlier this year to address the problem of euxtomers disappointed by thii inventories, Mr. johnsoa say*. "It is like going into mcDonAld's, asking for your burger and getting french friew.il he says.
Other studios could follow soon. Time Warner Znc.'s Warner Uree. is weighing a &hilt to revenue xharl=g. The company's internal research reveals a sharp drop in the yora ntago of VCR owners who regularly rent movies. Fully 20t of customary survey:d said they were unable to rant the movie they wanted ctn typical trip to the video store,
Indeed, the ]Nnrner Bros. research suggests that the longer people have a VCR, the leas interested they are In renti!ig old titles and the more they -w&'At current hilm. '@Ttle become a fashion business." says Warren Liaberf4it-b, president of Warner's home video unit.
Unless significant modifications are redeem Mr. Liabortarb warns, "growth
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