Where Do Local Rental Dealers Get DVDs? The Answer May Surprise You...
07-13-06, 08:59 PM
#1
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Where Do Local Rental Dealers Get DVDs? The Answer May Surprise You...
Guess some of those B&M discount deals are too good to pass up...
From Home Media Retailing
http://www.homemediaretailing.com/in...=22&image.y=16
"Sideways Buying on the Rise
Author: JUDITH McCOURT
[email protected]
Posted: July 12, 2006
Independent video rental dealers may not be buying as much product as they used to — studio estimates of indies’ buying clout ranges from 15% to 20% — but those estimates may be diluted because studios are only tracking sales through traditional distribution.
A Home Media Research survey found that 52% of independent rental dealers buy DVDs at Wal-Mart, Target and other discount retailers and then redirect them into their rental or sellthrough inventories.
The May 2006 survey of more than 300 indie retailers found 27% saying they are buying more of their video inventories from other retailers than they were a year ago.
On average, the rental dealers who buy DVDs from other retailers obtain nearly 40% of their inventory in this manner. Rental dealers who buy from mass merchants and other discounters every week said they buy nearly 75% of their DVDs from this channel.
New releases are the most commonly bought product, cited by 91% of rental dealers who buy from other retailers. On average, these rental dealers said they turned to mass merchants and discounters for 28% of their Walk the Line inventories, 27% of their Chronicles of Narnia buys and 25% of their King Kong purchases.
Catalog titles draw sales to 40% of independent rental dealers, with 30% buying games, 28% buying children’s video titles and 20% buying TV DVD titles.
Rental dealers also turn to discount chains for replenishment, with 37% saying they make a quick trip to the local mass merchant if they find they misjudged their initial order.
Wal-Mart and Sam’s Club are the leading de facto DVD “wholesalers,” servicing 39% of independent rental dealers. Target is a distant second at 8%, followed by Best Buy (6%) and Costco (4%).
Nearly two-thirds of rental dealers said they buy DVDs from other retailers because the prices are lower than through distribution."
From Home Media Retailing
http://www.homemediaretailing.com/in...=22&image.y=16
"Sideways Buying on the Rise
Author: JUDITH McCOURT
[email protected]
Posted: July 12, 2006
Independent video rental dealers may not be buying as much product as they used to — studio estimates of indies’ buying clout ranges from 15% to 20% — but those estimates may be diluted because studios are only tracking sales through traditional distribution.
A Home Media Research survey found that 52% of independent rental dealers buy DVDs at Wal-Mart, Target and other discount retailers and then redirect them into their rental or sellthrough inventories.
The May 2006 survey of more than 300 indie retailers found 27% saying they are buying more of their video inventories from other retailers than they were a year ago.
On average, the rental dealers who buy DVDs from other retailers obtain nearly 40% of their inventory in this manner. Rental dealers who buy from mass merchants and other discounters every week said they buy nearly 75% of their DVDs from this channel.
New releases are the most commonly bought product, cited by 91% of rental dealers who buy from other retailers. On average, these rental dealers said they turned to mass merchants and discounters for 28% of their Walk the Line inventories, 27% of their Chronicles of Narnia buys and 25% of their King Kong purchases.
Catalog titles draw sales to 40% of independent rental dealers, with 30% buying games, 28% buying children’s video titles and 20% buying TV DVD titles.
Rental dealers also turn to discount chains for replenishment, with 37% saying they make a quick trip to the local mass merchant if they find they misjudged their initial order.
Wal-Mart and Sam’s Club are the leading de facto DVD “wholesalers,” servicing 39% of independent rental dealers. Target is a distant second at 8%, followed by Best Buy (6%) and Costco (4%).
Nearly two-thirds of rental dealers said they buy DVDs from other retailers because the prices are lower than through distribution."
07-13-06, 09:53 PM
#3
DVD Talk Legend
Yeah. I saw this every Tuesday, when I worked at walmart.
07-13-06, 10:12 PM
#5
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It doesn't suprise me, I'd heard about this before. It makes since when sometimes these B&M stores are selling DVDs for less than even they can get them for.
07-14-06, 01:53 PM
#8
DVD Talk Legend
The answer *kinda* surprises, not because it's a good idea for the guy buying them, but because I thought most stores like that wouldn't sell to other storeowners?
Although, I just realized I've seen people buy stuff at places like Sam's Club for their restaraunts and such, but not regular Wal-Marts.
Although, I just realized I've seen people buy stuff at places like Sam's Club for their restaraunts and such, but not regular Wal-Marts.
07-14-06, 02:01 PM
#10
DVD Talk Legend
Originally Posted by Suprmallet
That makes sense. Get a DVD at Wal-Mart for $14.99. Rent it four times at $4 and you've already made your money back.
true
07-14-06, 05:13 PM
#13
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This practice has been going on for years...ever since DVDs went "mainstream" with mass merchants. The more devalued DVDs become, the more attractive they'll be to independent stores - heavy heavy heavy discounts. DVDs are sold way below cost now (loss leaders)...
07-14-06, 05:45 PM
#14
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Not surprising at all. I've looked into a few places that provide rental stores with product and they charge an arm and a leg. You can get a title for $14.99 on sale the first week it's available at Best Buy, or you can go through VPD and get it for $20 IF you order at least 10 copies.
The only advantage the stores have when ordering through VPD or the like is that they get their movies early and can have them on the shelf when they open on Tuesday morning.
The only advantage the stores have when ordering through VPD or the like is that they get their movies early and can have them on the shelf when they open on Tuesday morning.
07-14-06, 05:57 PM
#15
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I've never even bothered renting DVDs (except for a couple that were out of print) since you can buy them so cheaply. Though I work for a retailer, often stores like Wal-Mart and Target will have DVDs on sale for less than what I could get with my employee discount.
07-14-06, 06:14 PM
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Okay, this seems like a stupid question since no one else has even mentioned it yet, but is it illegal to do this? I thought DVDs purchased through regular channels (store bought) were intended only for private home viewing, not commercial redistribution.
So either I'm wrong, or everyone else has taken this for granted. Either way I lose by asking.
So either I'm wrong, or everyone else has taken this for granted. Either way I lose by asking.
07-14-06, 06:18 PM
#17
Senior Member
The article didn't really surprised me. I always suspected local stores, and even some Hollywood Videos of doing this. I know I told one local store about DDD, and I think they went ballistic because the next week the store had a ton more movies.
07-14-06, 07:57 PM
#18
DVD Talk Legend
Originally Posted by J-Log
Okay, this seems like a stupid question since no one else has even mentioned it yet, but is it illegal to do this? I thought DVDs purchased through regular channels (store bought) were intended only for private home viewing, not commercial redistribution.
So either I'm wrong, or everyone else has taken this for granted. Either way I lose by asking.
So either I'm wrong, or everyone else has taken this for granted. Either way I lose by asking.
07-16-06, 01:56 PM
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It would pretty much have to be to get any sort of response to questions about a store's purchasing practices. I was under the impression that there was some sort of mechanism in the industry to enforce the laws against this, but I wonder if there really is any way to know?
07-16-06, 02:03 PM
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It's defintely not illegal. Furthermore, rental outlets don't pay more for their DVD copies than anywhere else; this practice ended with VHS tapes.
Blockbuster didn't get Land of the Dead because Universal wanted them to pay in cash for it instead of credit. Blockbuster had (has?) a habit of delaying payment to its creditors.
Blockbuster didn't get Land of the Dead because Universal wanted them to pay in cash for it instead of credit. Blockbuster had (has?) a habit of delaying payment to its creditors.
07-16-06, 02:18 PM
#25
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Originally Posted by wewantflair
It's defintely not illegal. Furthermore, rental outlets don't pay more for their DVD copies than anywhere else; this practice ended with VHS tapes.
Blockbuster didn't get Land of the Dead because Universal wanted them to pay in cash for it instead of credit. Blockbuster had (has?) a habit of delaying payment to its creditors.
Blockbuster didn't get Land of the Dead because Universal wanted them to pay in cash for it instead of credit. Blockbuster had (has?) a habit of delaying payment to its creditors.
