A Real Success

Scott Barbour, president of independent home video supplier Real Entertainment, is pretty smug these days. While the big movie studios are trying to figure out why consumers aren’t renting or buying as many feature films on video as they used to, Barbour has retailers salivating over his next release, a series of outtakes from television’s “Jerry Springer” talk show that has already sold hundreds of thousands of copies through direct response since its early October debut.

“ ‘Cops: Too Hot for TV’ [Real’s first release] was a phenomenal smash for us when it first came out; I think chainwide we did around 5,000 units for 100 stores,” said Cliff MacMillan, product manager for Tower Records/Video, a chain of music and video stores based in West Sacramento. “And the Jerry Springer tape will be even bigger. I hear it’s doing gangbuster through mail order, and I’m looking forward to when it will be available at retail next year.”

Most video business is selling packaged movies. Barbour, 36, doesn’t pretend to be in the movie business.

“We’re not your typical video company,” Barbour said with a laugh. “We don’t do feature films. I don’t want to compete with studios. The studios do a real good job with feature films, and I don’t think there’s a void there.”

The void Real Entertainment is attempting to fill, as the Santa Monica-based firm’s name suggests, is reality programming--candid footage of real-life events, from cops-and-robbers shootouts and natural disasters to the Memphis Mafia discussing the “Secret Life of Elvis” and outtakes from Springer’s syndicated parade of freaks.

Reality programming has been the rage on television since the late 1980s, ever since the fledgling Fox network enjoyed unexpected success with “Cops,” “America’s Most Wanted” and other sensational, pseudo-documentary footage. More recently the rise of “shock talk” show hosts like Jerry Springer and Rikki Lake fueled the fire.

While other home video suppliers have dabbled in reality programming, only Real has devoted its entire business plan to the genre.

In its short two-year history, Real Entertainment has released more than 30 video titles, all priced under $20 for direct sale to consumers. Most of them are produced on shoestring budgets and with no recognizable directors, stars or even plots. And yet the sales figures Real has realized for its video voyeurism is nothing to sneeze at. In 1996, its first full year of business, Real generated $34 million in revenue.

“That type of programming appeals to a broader scope of people than you might think at first blush,” said Joe Pagano, merchandise manager for music and movies at Best Buy. “It’s things you read about happening, but never see.”

But striking the public’s fancy isn’t enough. Barbour credits much of Real Entertainment’s success to a unique marketing strategy that includes both direct response and traditional retail, which most video distributors see as incompatible. Most Real Entertainment releases are marketed on TV for six months before they are available at retail. Conventional wisdom holds that retailers won’t carry videos that have been sold through TV first. But according to Barbour, “nothing could be further from the truth.”

“When we run something on TV, it creates a brand awareness that later helps rather than hurts the product in stores, and our retailers know that,” Barbour said, noting that Real’s sales are evenly split between direct response and retail.

Direct response also helps Real “create a database of consumers who are fans of this programming, so we can then sell them brand extensions like T-shirts and caps and other branded merchandise,” Barbour said.

Real Entertainment’s prowess with direct response has led to TV distribution deals with such established video vendors as Playboy Home Video, Fox Television and Universal Studios Home Video, for whom Real is now selling episodes from the “Xena” TV series. Last August, Real opened a separate 20,000-square-foot telemarketing center in San Diego with 120 employees.

Real Entertainment was formed in the fall of 1995 to release a trilogy of outtakes from Fox Television’s popular “Cops” series, developed in 1988 by Barbour/Langley Productions, a production company run by Scott Barbour’s father, Malcolm, and John Langley.

The “Cops” phenomenon has achieved near legendary status in video marketing circles. The trilogy of titles--one, “Cops: Too Hot for TV,” consisting of scenes deemed too racy for broadcast; the other two, spectacular chases (‘Cops: In Hot Pursuit’) and actual crimes (‘Cops: Caught in the Act’)--went on sale in October 1995 for $19.95 each. By July 1996, the trilogy had sold 500,000 units.

But that was only the beginning. Barbour, partnered with John Langley, took the videos to retail and within months had shipped more than 1 million units. According to one research report, retailers reported “Cops: Too Hot for TV” was the single most profitable release of 1996.

The “Cops” success triggered a nasty legal battle with a company called Marketingworks, which Barbour and Langley had partnered with to market the tapes. In February 1997, Real seized control of all assets of the joint venture it had formed with Marketingworks and filed suit in Superior Court, accusing its former partner of fraud, breach of contract and other charges relating to an alleged kickback scheme.

Marketingworks filed a cross-complaint demanding payments of its share of the profits. In June, a judge issued an injunction prohibiting Real from using any cash or assets belonging to the joint venture until the matter is resolved.

(On Dec. 12, Real was found to have violated this injunction by using a customer list with names, phone numbers and addresses of 600,000 people who had purchased the “Cops” videos. Sentencing has been set for Dec. 31. Barbour denies the charges, but Marketingworks attorney Roy Silva said “the evidence was overwhelming; we had a letter signed by one of Real’s agents, offering to sell another company’s video tape using the ‘Cops’ customer list.”

Since “Cops,” Real has employed its direct-response-then-retail strategy on more than two dozen other releases, from a six-video set of never-before-seen interviews with Elvis Presley’s notorious “Memphis Mafia” (it came with a free audio cassette of “secret Elvis phone conversations”) to the “Amazing Video Collection” of natural disasters, blazing fires, daring rescues, and dangerous accidents and stunts.

Thomas K. Arnold is editor in chief of Video Store Magazine, a weekly trade magazine serving the home video industry.