Niche marketing: special interest videos latest focus - video recordings industry - Video Sell-Through

Discount Store News, Sept 6, 1993 by Frank M. Viollis

With manufacturers focusing more heavily on niche marketing, special interest videos have gained ground in the competitive sell-through industry

However, because special interest only represents a small portion of the total industry's overall volume (conservative estimates put special interest video sales at a little over the $100 million a year mark), its role is easily overlooked.

"Special interest videos are a misunderstood element in the video industry," declared Ted Lannon, president of Lincoln, Neb.-based Fairfield Research Inc. "Mostly," he continued, "because, there are so many categories that make up what we qualify as special interest."

Specialinterest can range from foreign language tutorials to travel logs, from rock music extravaganzas to civil and world war documentaries.

"When we look at the titles that fill this category," Lannon added, "what we're really looking at is a host of small market niches. The overall market share [for special interest videos] is very small when viewed against that of the feature film.

"After all, it's not realistic to have the same expectations for special interest properties as you do for major theatrical, blockbuster releases," Lannon said. "A special interest title that sells 500,000 units would be a huge success. A movie with the same numbers wouldn't be."

In 1987, special interest videos accounted for 20% of all videos sold (more than half of those were exercise videos). By the beginning of 1993, that number had dropped to 11% (with exercise being reduced to only 2% of the total).

"Our research confirms that consumer demand for special interest titles is increasing at a faster pace than for any other category of video titles," declared the president of a Connecticut-based research firm specializing in the special interest genre.

"Retailers have," he continued, "historically not received as much of the special interest action as they should have, and today appear to be down-playing their interest in the category, altogether."

Perhaps the consumer's growing interest in this video product line, and the apparent decline in sales volume, has something to do with the flexibility with which it can be marketed. The special interest video has a unique quality that movies lack. It can be offered as a free, value-added premium, or bonus, along with the purchase of a companion product.

For example: a joint venture between Polygram Video and Reebok, produced a "step-aerobic" exercise video that had a retail price of $29.95. Many consumers purchased the product individually, and many obtained the video product by purchasing the Reebok exercise "step." Their purchases added nothing to the category's sales profile--those statistics are based solely on consumer video purchases. However, those purchases helped sell a much higher margin product.

"Most areas in the special interest category have been pretty fully explored, or exploited, by now," said Mark Gilula, vice president, sales and marketing for Stamford, Conn.-based capital Cities/ ABC Video Publishing, Inc. "There are very few untapped market niches left."

However, ABC Video and ABC Daytime Television, have found one: soap operas.

"Soaps are never repeated. Whatever happens, happens, and that's it. If you miss it, you don't get a second chance. That's the nature of sops

"We're aiming this product," said Gilula at the more than 40 million extremely loyal fans (retail demographics show them to be females between the ages of 18 and 45) who watch soaps each week.

ABC will debut its soap series Sept. 15 with three ABC Daytime's Greatest Weddings: "All My Children," "General Hospital" and "One Life To Live." Each will have a suggested list price of $14.98 (with $3 and $5 rebates and cross promotional coupons for Lysol products).

One marketing plus that ABC has going for it is that much of the material used in creating these properties aired before most people had VCRs and many episodes played before home taping was possible.

"I've been in the business 12 years and I've never seen such a response from retailers, especially mass merchants. It's the mass merchants we're aiming this at," he concluded. "After all, our target audience, is their core customer." ABC's approach is a prime example of how to aggressively utilize the special interest video's strong suit: niche marketing.

"We've done a lot of work with niche marketing," explained Bill Sondheim, senior vice president of sales and marketing for Polygram Video, "and, we've found that what works best, is to go after major brands, with existing market recognition."

New York-based PolyGram has built a catalog of more than 600 titles in such special interest domains as: sports, fitness, music and children's videos.

"We look for brands that can have a video life of their own," he added. "For example, the NFL [one of Polygram's most notable properties] has a logo that's among the most widely recognized in the country. And we've been very successful with it."

"The foundation of the company has been in music," admitted Joe Shults, president of PolyGram Video. And, in keeping with that mandate, PolyGram's NFL line includes properties like "NFL Country," which mixes high energy NFL footage with country music. This year's NFL country music video will be called "NFL Outlaw Country."