Rental Slowdown Means Benefits for Consumers


The soft rental market, a fact of life in the home-video business for the last year or so, is hurting video stores but it has also prompted a shift in focus that is benefiting consumers.

Looking to increase profits, some video companies are beginning to concentrate on the sales market, which has been expanding during the rental slowdown. Companies are stepping up their cassette sales programs, offering more titles at $15--both old movies and "A" titles that are a few years old. Retailers often discount them to $11 or $12.

What has happened is that the quality of movies in the budget-priced market has markedly improved, which is attracting customers. About two years ago, most of the movies in the under-$15 price range were B pictures or fairly obscure old films.

Now the bigger companies are beginning to release older movies at $15. For instance, Paramount, a leader in this budget market, will put out film versions of two Neil Simon plays--"Come Blow Your Horn" (1963) starring Frank Sinatra and "Star Spangled Girl" (1971)--at $15 on Aug. 8. Other Paramount movies debuting at $15 include "Houdini" (1953) with Tony Curtis, "Hannie Caulder" (1972) starring Raquel Welch and "Heller in Pink Tights" (1960) with Sophia Loren.

One reason for the growth of the low-priced movie market is that video companies want to capitalize on expanded video departments in discount chains, such as K mart and Target, that are geared to sales. These chains prefer stocking titles that cost $15 or less and lean toward well-known G and PG-13 movies featuring major stars.

"All the companies want to provide movies for this lucrative market," said Hollace Brown, Paramount senior vice president of advertising and promotion.

Since the mid-'80s, some movie classics--often those in public domain--have been marketed in the $10-$12 range by small companies. One reason they've been offered so cheaply is that they have been duplicated at the slowest speed (EP on most VCRs). In this mode, companies save money by using far less tape than movies recorded at the standard speed (SP). The problem with movies in the EP mode is a drop-off in picture quality. Brown said that Paramount records all its budget-priced movies at standard speed, a fact noted on stickers on the cassettes.

Can the suggested retail price of movies get much lower than $15?

"Not much lower when you're recording at the fastest speed," Brown replied. "Even now the profit margins are pretty slim."

'Wolves' Release: The biggest open secret in the home-video business seems to be that Orion plans to release the Oscar-winning "Dances With Wolves" on Aug. 28 or 29, just before Labor Day--one of the biggest rental weekends of the year. Orion is expected to make the official announcement early next month. There is no new word about plans to release a longer version of "Wolves" containing footage not included in the original movie.

Retail sources predict that Orion will ship 500,000 to 550,000 copies.

"Wolves" will have no suggested retail price but retail sources say they expect its wholesale price to bring it into the $100 retail range.

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