To rent or buy—the video dilemma of the 1990s

Press, 29 December 1989, Page 7

To rent or buy—the video dilemma of the 1990s

By ALAN MIRABELLA NZPA-KRD New York It was the great fear, the unknown entity thought to have the potential to imperil the American film industry. But how wrong everyone was about home video! While once film studio executives worried that video would put the movie industry out of business, today the two are happy bedfellows. The great fear has turned into the great wonder. Distress has turned into dollars — billions of them.

In just a decade, home video has leapt from being an expensive object of the rich to an American mainstay bringing in billions of dollars to movie studios and video companies. Home video sales and rental revenues have risen substantially. And each year they consistently out-strip cinema box office revenues.

Sky-high revenues and consumers’ increasing thirst for video have made this once-

— five months after their cinema release —• of “Batman" and “When Harry Met Sally . .i.” demonstrates how powerful the business has become, and will continue to be.

That the “Batman” video carries a low price of $U524.98 ($41.98) - which will be discounted in some stores — indicates that video companies are becoming more competitive and aggressive in attempting to lure consumers.

Where once films disappeared for two to three months before hitting video after six to eight months, today the industry is working to ensure that films move as quickly as possible from theatres to tape. While that is a reflection of the- industry’s rapid growth and urge to cash in on z hit movies, there is a dramatic departure occurring: the business is attempting to turn the American consumer from avid movie renters into bigtime video buyers.

Early next year, a host of hit films is expected to be available on video at lower prices, including the surprise hit “Honey, I Shrunk The Kids,” as well as Mel Gibson’s “Lethal Weapon 2” and “Indiana Jones and the Last Crusade.”

The trend comes on the heels of the incredible video success of both “Top Gun” and “E.T.,” which proved to video' companies that more money could be made by selling films at discount prices (as little as SUS2O) to consumers rather than at premium prices (SUSB9 and up) to retailers who rent. “Top Gun’s” release in 1987 at $U526.95 resulted in sales of three million copies and provided the industry with a glimpse of the financial potential of selling. But it was the record-breaking, 15 million-seller, “E.T.,” released in late 1988 for $U524.95, that demonstrated once and for all the blockbus-

ter bucks available through sales.

To rent or buy? That ; will be the video dilemma of the 19905. And there’ll be low, low video prices and shrewd marketing out there to influence you.

It’s a big gamble, though. If consumers don’t take the-bait on buying, video companies lose money that could have been made selling tapers to retailers at high prices. Industry analysts, however, believe the movement to make Americans video purchasers is occurring' in response to two factors: the growing belief that video has been doing its business incorrectly and that consumers are disenchanted with renting. “If you think about it,” says Seth Goldstein, senior editor of “This Week In Consumer Electronics” magazine, “home video has been doing their business backward. To buy and keep is the American tradition and video has been fostering renting.

“People have not . been brought up to rent anything — except cars,” he says. “So, essentially video is flipping its business back around to what it should have been: buying.”

business back around to what it should have been: buying.” There’s one hitch to all of this selling talk, though. It’s not going to work if the movie isn’t a big-name blockbuster. Last year’s release of “Good Morning Vietnam” is regarded as a good example of a big movie that was put out for sale but wasn’t big enough to draw big numbers of purchasers. That home video would imperil the movie industry and shut down cinemas has been the big video myth since the VCR hit the scene in the ’7os. Instead, it has come to propel the movie business both economically and creatively. “A lot more movies are being produced because of video,” says “Variety’s” Stewart. “There are countless films that never would have been made without x the money from video.”

There’s one hitch to all of this selling talk, though. It’s not going to work if the movie isn’t a big-name blockbuster. Last year’s release of “Good Morning Vietnam” is regarded as a good example of a big movie that was put out for sale but wasn’t big enough to draw big numbers of purchasers.

That home video would imperil the movie industry and shut down cinemas has been the big video myth since the VCR hit the scene in the ’7os. Instead, it has come to propel the movie business both economically and creatively.