Retailers Gamble on Video Winners : Movies: With a plethora of holiday releases on their way, stores must decide in advance which films their customers will want to buy.

“Jurassic Park,” “Snow White and the Seven Dwarfs” and “The Flintstones” are already in stores. “Speed,” “Maverick” and other box-office giants are about to be released. With the holiday buying season coming, it’s video overload time for consumers. But it’s also overload time for retailers, who find their marketing pressures heightened during such a critical period.

Both mom-and-pop retailers and the biggest chains have their own strategies for deciding how to stock up on videos.

At Blockbuster Entertainment Corp., video-purchasing executives review every video submission before making a decision. “We personally go through 200 to 250 new releases on a monthly basis,” said Tom Szwak, vice president of purchasing. “It’s an enormous amount of product to go through in a month, but we don’t feel we do the supplier justice if we don’t sit there and watch the film.”

Szwak said that 51% of his decision is based on such raw data as box-office performance and how videos fared of movies with the same stars or similar subject matter. “Sure, we use the scan button, and there are many of what we call ‘Man With a Gun’ movies,” Szwak said, “but we have to ask ourselves how many of these movies we can have come out within a given month, look at the production values of the film and pick something that is not too cheesy.”

The remaining 49% of Szwak’s decision is based on his gut feeling as he watches the film. But problems arise when personal preferences enter into the picture. “The biggest pitfall of this business is being too subjective, rather than objective, and the worst thing is to be a critic,” Szwak said, describing how being too subjective got him in trouble. At one point he and his staff felt they had too many science-fiction movies, so they ordered less. “But then the customer base would say, ‘We want more sci-fi,’ and we’d under-bought it.

“We have to remember that there is an audience, and we have to give the customer what they want to see,” he continued. “Another dilemma we face is balancing the depth of a film with its breadth, and we continue to try to walk on that tightrope.

“You do have customers that walk into the store and say, ‘Give me something different.’ They want the hits as well as something different.”

John Thrasher, vice president of video purchasing at Tower Records, said a number of factors influence video purchases. “How the movie did at the box office is a key indicator,” Thrasher said. “Its ‘star power’ or who is in the film matters, plus the history of other films of that type.”

And then there is another factor: the video distributors’ willingness to advertise and market their movies.

Even before a video hits the shelves at your local video store, it is widely promoted. Thrasher cites Disney’s TV blitz for Tim Burton’s “The Nightmare Before Christmas,” which was released on video Sept. 27, as a prime example of effective promotion. “A lot of (customers) are more comfortable with a Disney product,” Thrasher said. “The advertising really drives consumers into their local outlet to buy or rent the video.”

In anticipation of the Oct. 28 videocassette release of Disney’s “Snow White and the Seven Dwarfs,” consumer incentives from Walt Disney Home Video included a promotion offering savings of up to $15 with additional purchases, a coupon book and a rebate offer with Pillsbury, as well as merchandising packages through Disney licensees and the Disney Store.

According to a distribution spokesman with Disney, as of Nov. 4, retailers had placed a record 27 million video orders for “Snow White and the Seven Dwarfs.”

MCA/Universal Home Video and its promotional partners spent more than $65 million in marketing and promotional support for “Jurassic Park.” Consumer incentives for the movie, which was released Oct. 4, included a gift-with-reservation program, urging customers to “reserve a copy,” mail-in rebate programs in conjunction with partners Kraft, General Foods, Jell-O brand and McDonald’s, a national “Escape to Kauai” Jurassic Park Sweepstakes and videocassette mail-in rebate inserts. Maria LaMagra, vice president for publicity at MCA/Universal, would only reveal that 22 million units of “Jurassic Park” have been shipped as of this date.

Still, retailers aren’t only lured to blockbusters. It is not uncommon for a film to fail at the box office and do well on video. “Reservoir Dogs” by Miramax Films drew just $1.9 million in theaters, but the videocassette sold more than 100,000 units. “It is well documented that films that didn’t perform well at the box office often enjoy a second and better life on video,” Szwak said. “People are willing to gamble a couple bucks at the video store because paying a sitter in order to go out to dinner and a movie can be costly.”

“The lion’s share of revenues comes more from videos rather than theatrical productions,” Thrasher said. “Even in the beginning, when they’re making the movie, deals are being made for its release on video.”

At Tower, video selections are also based in part on the revenue of a particular store and its demographics. “There might be really small films, and one might be shot locally,” Thrasher said. “It wouldn’t be heard of around the rest of the country, but would do real well in the town where it was made.”

Local suppliers go about video buying differently. Tony Yang, manager of Video One in Hollywood, normally buys from a distributor. Videos must be pre-ordered at least one month in advance of the date it is wanted. The distributor provides retailers the opportunity to order all videos in advance, usually four to six weeks before the movie is due to be released to the public. The distributor places the order with the manufacturer to bring in the videos, which usually arrive a couple days before the release date.

Yang comparison-shops for videos. He has found that rather than always using retailers, “some places like warehouses, or Price Club, have the movie for a better price,” Yang said.

Some retailers rely upon recommendations from distribution-center sales representatives. “Our rep knows how many videos to buy and does all the ordering,” said James Lee, manager of Hollywood’s Hollyhills Video.

Incentives are sometimes offered to video retailers in an attempt to encourage them to purchase larger quantities.

LaMagra said the number of “Jurassic Park” units a store ordered determined the kind of displays the company provided retailers. The more you order, the bigger the display.

Other kinds of incentives include gifts for the retailers. For example, for each five-unit pre-pack order of Spike Lee’s “Crooklyn” video, MCA/Universal gave a “Crooklyn Funky Tunes” personal cassette player with stereo headphones plus the “Crooklyn” soundtrack cassette. Video buying is a complicated, highly competitive process and involves much more than luck to be successful. “Ten to 12 years in this business gives you the reality check you need to make the right decisions,” said Szwak.