Video retailer pays for early "Rings" DVD sales

By Brett Sporich

LOS ANGELES (Hollywood Reporter) - Video retailer Electronics Boutique is in hot water for allegedly selling DVDs of "The Lord of the Rings: The Return of the King" 10 days before the official May 25 release date.

Warner Home Video, the DVD distributor of the Oscar-winning title, has suspended all home video shipments to West Chester, Pa.-based EB, which controls about 1,000 retail stores in malls across the country and about 500 additional stores overseas.

"Violations of street date are all too common in the highly competitive home video industry," WHV senior vp domestic sales Jeff Baker said, "but what makes this case unprecedented is that EB and its store managers not only refused to pull the DVD from the shelves, but the company's executives have refused to cooperate or even discuss the issue.

"I've been in the video business since 1979, and I have never seen such a blatant violation of street date," Baker said. "We are not going to let them get away with this, and we are discussing the issue with our attorneys to consider every possible option."

EB officials could not be reached for comment. Warner Home Video executives said they don't believe any of EB's overseas stores are violating release dates.

Warner, which is the DVD and VHS distributor for its sister company New Line Home Entertainment, first received word of EB selling the "King" DVD before its release date on the studio's retailer hotline, Baker said.

Reports came to WHV from competing retailers large and small, complaining that EB was effectively stealing their business, Baker said. "The callers told us that the DVDs were blowing out the doors at EB, and we have verified several of these reports."

Without question, the "King" DVD is a prime release for EB's core consumers: video game buyers. "Obviously this title is right up their alley," Baker said.

As news of the release-date violation spread during the weekend and this week, there was some speculation that EB was using the DVD as a "loss leader," meaning that they were selling it for less than cost, a legal business practice in the United States.

However, Baker and others have said that EB stores have been selling the double-disc "King" DVD for $24.99, just under WHV's suggested retail price of $29.95, meaning that EB is not selling the title as a loss leader or under the wholesale price.

An informal survey of EB retail stores found that the "King" DVD had allegedly sold-out or was no longer on store shelves.

EB is scheduled to announce first-quarter results Thursday in a call with Wall Street analysts.

so what is the worst that EB could suffer from this?

They do this every few years to every retailer to show they still care. Usually they pick a mid-major player like EB, instead of going after other bigger stores.

They will pay a fine, issue an apology and a new memo from corporate. Thats probably about it.

I also thought I read somewhere that stores also won't get (depending on the studio) new releases when other stores get their copies.

If I was a competitor, I'd be pissed too. Of course, they will just end up getting what amounts to a slap on the wrist from WHV, (who wouldn't want to lose a decent sized account). However this does seem more blatant than a usual street date violation, and with a very high profile title. And I bet it helped their bottom line quite a bit.

In severe cases, an offending store could possibly not receive their shipment no earlier than day of release. Inconvenient, because that wouldn't give them a chance to organize and get things ready in time for release day.

At the EB in Beltsville, MD a ROTK was sitting on the counter last Saturday priced at $24.99. I tried to buy it but the manager said it was being held for one of the employees.

Good.. I hope they get it nice and rough for raping the video game industry for years like they have.

You should have pulled out your cell phone right there and dailed the WB hotline, complaining about their breaking street date

What a prick. Don't shop there again. To make a customer feel like they are less priority than an employee is inexcusable.

$24.99? Below cost? What a bunch a shit. I expect to walk into Wal Mart next Tuesday and pay $15 for it. This whole $29.99 MSRP is a crock. No one, (besides the rip-off mall-type stores) ever charges full SRP for their stuff.

And people scream at me when I chastise people on this forum for saying "OMG OMG OMG...I just saw EPISODE 3 ON SALE AT ****** on 10th ave and 2nd street."

Everyone knows who breaks. Just keep yer damn mouth shut.

Good for Warners...I'm glad they caught this. If I were them, I'd ban EB from carrying any DVDs OR Video Games produced by Time Warner...they just started a game division in January, and I'm sure they are tied into other titles that they have control over (i.e. Lord of the Rings and Harry Potter games).

People who live in OC - please email me with regular street date breakers...I want in!

You could always ask the judge for an order requiring all EB employees to remain celebate for the next year. Oh wait....that isn't necessary.

That's because they always aggressively ask the girls to pre-order the sex.

There's no need to start dissing the employees. Some of them (including myself) post on these boards.

That is a ghetto word.

Other than that I agree, the employees shouldn't be bashed. I'm sure that some of them do get laid by something.

Street dates suck- I want my stuff NOW!!!

The question here is, if the stock is shipped to retailers up to a week or two before street dates, then why are the street dates when they are? I mean, what's the purpose in waiting a week or so to put things on the shelf?

I mean, not that I agree with breaking street dates, but I just don't see the reasoning in holding back sales for some arbutrary date.

I would guess that not all the stores get the stock at the same time. Maybe due to shipping delays or how close they are to the warehouse that sends out the product. So to be fair to everyone I guess they leave enough time from when the product is shipped to the release date. To make sure everyone one is ready to sell what they have on the same day. That one no one can cry that another store is stealing their sales.

They ship them a week in advance and give it a buffer zone of Tuesday as the new release date so that all the stores can have the stock ready. Having new release on tuesdays makes it simple for stores to all start off at the same time selling. Imagine how annoying it would be if you didn't know what release date was and you drove around hoping a store recieved their stock and put it out on the floor yet.

It allows all the stores to start selling at the same time. simple as that.

What about the people that leaked Disk 1 of the ROTK DVD to the internet 2 months early? Do they even bother busting, or trying to bust, those people?

Well, that may be so, but I've been to Wal Mart before on release day of a major release (I think it was T3) and they didn't have their stock out yet. So, you still never know.