The DVD release of Finding Nemo earlier this year hassparked a pricing revolution in France, said Jean-Paul Commins, chief operatingofficer of independent distributor France Televisions Distribution (FTD), atScreen's DVD: The Home Cinema Summit in London on Thursday.
Apanel comprising Commins, Jan Rickers, head of marketing for Germany's Kinowelt Home Entertainment, and RichardLorber, of Paris- based Koch Lorber Films, debated the pricing dilemma forarthouse and specialist product.
According to Commins, Nemo is the first blockbustertitle to be released on DVD for under Euros 20. Prior to Nemo, ablockbuster title in France could retail at between Euros 25 -29.
The problem, said Commins, whose FTD commands a 2.5% marketshare, is price reductions have not stimulated sales. "We have no examples ofany more titles sold because of a lower price," he said.
Approximately 60% of DVDs in France are sold at retailoutlets with a marketing strategy to keep prices low, such as super-andhyper-markets. A further 10% are sold at newspaper and magazine kiosks, ofwhich there are approximately 15,000 selling DVDs. "There is a lot of potentialin kiosks but the downside is price," said Commins. "The competition is toughand they can sell DVDs for as low as Euros 5."
Kinowelt'sRickers said the biggest problem facing independent DVD distributors in Germanywas discovering the right price for the right product. In a territory where TheFellowship Of The Ring is now selling on a double disc DVD for Euros 6.99,Rickers pointed to the example of Kinowelt catalogue title Night On Earth.The company recently included Jim Jarmusch's 1991 title in a two-week pricingpromotion with German retail giant Media Markt.
"We sold twice as much in those two weeks as we did in thewhole of last year," he said.
However, Rickers pointed out Kinowelt also owns the LeniRiefensthal library, which can retail for as much as Euros 19.99 per disc. "Wewon't sell many but we won't sell any more if we drop the price," Rickersexplained.
"We can't sell an arthouse title for Euros 19.99 unless itis a special edition with nice packaging and lots of extras. For blockbusters,customers are waiting for the price to drop. I like the UK system wherebyprices rise the longer a film is on release."
Richard Lorber echoed the emphasis on keeping prices highfor premium product. "We are looking at ways to enhance the value which wedefinitely won't achieve by dropping the price," he suggested. "We look for aproduct line with unique, distinguishing features that has continuing value tothe consumer. Evergreen, collectable,intelligent entertainment, call it what you will."
Although Koch Lorber's DVD release of La Dolce Vitais retailing at 30% lower than other US retail outlets on Amazon, Lorberpointed out that the reduction is coming out of Amazon's share.
The biggest opportunity in the US DVD market right now, saidLorber, was the growth of the rental DVD business. "There is a new emergingrental business that is subscription rental," he explained. "Netflix hasimmediately become one of our top customers. They now account for between 5% -10% of our total volume."