New technology paves way for video's future: interactive games, value-added items offer new growth opportunities in video software - Video Sell-Through

Discount Store News, Sept 6, 1993 by Dawn Wilensky

LAS VEGAS -- New technology is likely to transform the face of the video sell-through industry in the coming years, and open new areas of mass market sales growth.

In addition to the usual multitude of celebrities hawking various movie and how-to video titles, the recent Video Software Dealers Association convention here served as a showcase for many of the new technologies forecasted to take the video industry by storm.

One of the most exciting technologies to emerge is an interactive CD-ROM format that allows users to interact with the software while enjoying its superior audio and visual components.

Besides allowing video stores to diversify into something new and lucrative (since the rental industry has become somewhat stagnant), the technology has opened non-traditional channels of distribution in consumer electronics stores, record stores, warehouse clubs and office superstores.

With this technology, users can take one disk and, at the touch of a button, access everything from a 34-year retrospective of the Grammy Awards to a review of more than 100,000 stories which have run in the USA Today newspaper in the '90s.

One of the biggest players in the market is Compton's New-Media, which has released a multitude of interactive software programs. Many of the titles are available for rent in video stores. Its most popular title, Compton's Interactive Encyclopedia 2.0, is the latest CD-ROM title to incorporate the nine million words included in Compton's Encyclopedia.

Companies like Republic Pictures and PF. Magic, an interactive entertainment company, have entered the fray with a Compact Disc Interactive System format. The two companies are using several episodes of Republic's "Cliffhanger" series from the '30 and '40s, such as "The Crimson Ghost," to develop interactive games that allow users the opportunity to control a variety of elements in each episode.

Although it will probably take quite a while before this advanced technology filters down to the mass merchant level, a new entertainment merchandising devise will be hitting discounters' shelves in the near future.

In its final development stage, The Preview Machine by Interactive People Systems, will display 15- to 60-second trailers of sell-through video titles at the customer's request.

"Essentially, it's an on-demand advertising device," said Grainger McKoy, president of IPS. "We give studios and their distributors a way to inexpensively entice the shopper--when he or she has their product either in-hand or located nearby," he explained.

Another major announcement at the show was a video distribution agreement between Buena Vista Home Video and DIC Animation City Inc. The agreement comprises more than 1,000 half-hours of DIC's animated children's programming, many of which have never been available on video. The DIC video label will launch its own packaging, logos and individual marketing concepts. Among the titles included in the agreement are Inspector Gadget, the Care Bears, Sonic the Hedgehog, Super Mario Bros. and the Trolls.

With mounting competition, video manufacturers are looking for ways to appeal to their customer base. One way they've chosen is specialization, which comes in many forms, most notably in the form of special interest topics.

Once a stepchild to the video industry, the special interest genre has claimed its role in the video market with much success. In fact, at this year's VSDA, the category was given much more prominence than ever before. According to Karen Rabinowitz, vice president of sales and marketing at View Video, "We're finding that the whole special interest category is emerging as the population becomes more segmented."

Other special interest videos at the show included Wedding Day Dancing, distributed by Step By Step Dancing, which takes couples with two left feet and turns them into Fred and Ginger on their wedding day. "A live instructor is best, but if it's inconvenient or too costly, this is a great alternative," said Chris Reilly, the dance instructor on the video.

For those who want to work their minds instead of their bodies, The Smithsonian Institute has introduced a line of videos on earth science, art and even American and African-American history and culture.

Adding value to products has made a big impact in the video arena. UAV Video has done very well with a Video Gift Pak that includes a video and a plush toy with a space in the back of the packaging so children can fell the plush.

Also adding value to their videos, Wood Knapp has brought Maurice Sendak's characters to life with a video version of his stories with plush characters to go with them. "The line was so successful, it sold out, but we will re-emerge with this line as well as three others," said Harold Weitzberg, vice president, sales and marketing at Wood Knapp.

But Weitzberg went on to explain that value-added videos have their own intrinsic problems because of the limited amount of shelf space that many retailers have.

What retailers seem to make plenty of room for on their shelves are the old TV favorites that have proven very lucrative for the sell-through market. UAV has a line of videos in its The Best of TV series with episodes from "Hill Street Blues," "Andy Griffith," "The Mary Tyler Moore Show," and "I, Spy." "The Andy Griffith videos do very well at Wal-Mart," said UAV's Jerry Pettis Jr.