Direct-to-video, promos may fast-forward 1Q '97 sales

Discount Store News, Jan 20, 1997 by Robert Scally

Despite a lack of major titles hitting stores in the first quarter, Hollywood's leading film studios will keep the sell-through home video product pipeline pumping with repricings and promotions.

In the wake of the biggest quarter for sell-through-priced video releases since the home video industry began more than 15 years ago, the first quarter typically brings a precipitous drop in video sales. But plenty of name brand catalog product at popular price points may help to cushion some of the traditional slowdown.

Sales of home video titles were strong going into Christmas, according to industry sources and published reports. Store managers at Wal-mart and Target said that big promotions helped sustain sales of Twentieth Century Fox's "Independence Day" and Buena Vista Home Video's "Toy Story."

While reports of sales are still coming in, the fourth quarter of `96 saw the largest sell-through slate in the history of home video.

Many industry insiders predicted that actual sales for the fourth quarter would surpass a total of 100 million units. Various industry estimates and published reports indicated that the top three fourth quarter sell-through titles - "Independence Day, "Toy Story" and "Twister'- had initial shipments of about 53 million units.

Several major studios are aiming to establish a release pattern that will generate excitement for various genres of titles during times of the year other than the fourth quarter.

Consumer spending on sell-through home video has risen from 37.5% of total video spending in 1993 to nearly one-half of all video spending during a period when rental spending has remained nearly flat, growing at less than 5%, according to a recently published Video Store magazine survey.

Adams Media Research surveyed 700 households nationwide during November and found that 41% of consumers surveyed said they buy videos at mass merchant outlets such as Wal-mart, Target or Kmart, with another 11% reporting that they purchased videos at warehouse clubs like Sam's Club and PriceCostco.

The survey also helps to show the muscle of the kidvid market.

In the survey, the average household owned a video collection consisting of 49 tapes, about 21 of which were for children. The same household bought 10.4 videos last year, half of which were kidvids.

Not surprisingly, households with children ages 6 to 11 owned the most tapes, 73, of which 40 were for the little tikes.

One-third of all respondents to the survey said that buying videos for children was their primary reason for purchasing videos.

Home videos apparently stuffed more than a few stockings this holiday season and shifted marketing tactics by the major Hollywood studios that are working to maintain home video sales as a true year-round business and not just a seasonal phenomenon.

Taking a new promotional tack, Twentieth Century Fox Home Entertainment will use what it says is the first video-specific freestanding insert (FSI) coupons. Fox will distribute more than 50 million $1 FSI coupons on Feb. 9 in support of a trio of romance videos being released in time to take advantage of Valentine's Day.

FoxVideo will release "A Walk In The Clouds," with Keanu Reeves and Anthony Quinn; Hugh Grant's "Nine Months;" and "The Truth About Cats and Dogs," with Uma Thurman, on Feb. 4 (prebook Jan. 13) at a minimum advertised price of $9.95 each, with a $14.95 suggested price.

The FSI campaign will be supplemented by a contest that will give away 14 trips for two to Aruba. A national TV ad campaign will also support the promotion.

"Coupons continue to be one of the best ways to motivate immediate awareness and trial of new products and are perfect for these titles," said Brad Kirk, senior vp of marketing at Twentieth Century Fox Home video. "More than 30% of FSI coupons are redeemed in the first two weeks after distribution."

Sony Wonder meets the demand for the sometimes neglected video market for girls ages 2 to 7, with the Feb. 4 release of "Party Town Friends: Tea Party Twins." Priced at $9.98, the title will be supported by a multi-city "Party Town Friends" mall tour that will begin in February.

Sony Wonder has also teamed up with software developer Live Pictures and Kodak Digital Processing for a unique cross-promotion with software and photos.

Included in each video is a coupon to purchase LivePix photo manipulation computer software for $10. For an additional $10, Kodak will develop a 24-exposure roll of 35mm film in prints and on a computer disk that can be used with the LivePix software.

On Feb. 18, Sony Wonder is releasing the latest installments in the "Jane Hissey's Old Bear Stories." Each volume contains three episodes and is priced at $9.98. Consumers who buy any two "Old Bear" titles are eligible for a $3 rebate.

Buena Vista will be debuting its first live-action direct-to-video feature film, "Honey, We Sunk Ourselves," starring Rick Moranis, on March 18 (prebook Feb. 4) at a suggested retail price of $22.99. The film capitalizes on the success of the first two "Honey" films, which also starred Moranis, said Dennis Rice, senior vp of marketing for Buena Vista Home Video.