NET SALES: VIDEO STOREFRONTS VIA THE INTERNET
In the ancient past (in Internet terms, that means a year or two ago) if consumers wanted to purchase a documentary about the Civil War on home video, they had a couple of options. They could go to a local retail or video store, which most likely stocked limited titles, if any. They could order via a speciality catalog, if they knew where to get one. They could order via an 800 number, if the documentary they wanted happened to have aired on TV. Or maybe they could pick up a tape at a historical site or museum, if they happened to be traveling in that area.
Today, the Internet has made purchasing documentaries on home video an impulse buy. Within a few minutes and a couple of Web searches, a consumer can click on a myriad of retail and specialty sites to choose from a regiment of Civil War videos. A search at Amazon.com calls up 77 Civil War-related titles. Historychannel.com lists 28. PBS has over 15. Whether one is looking at large e-commerce sites like Reel.com, specialty sites like Documall.com or Civil War websites, there’s a pretty good shot that even the most reluctant user of the Web will find what he or she is looking for.
On-line: the fastest growing video retail opportunity
As it has done for books and music, the Internet has flung the doors wide open for the sale of special interest and documentary home video. The endless shelf space offered on the Web gives consumers the chance to find videos on niche topics ranging from biography to wildlife, religion to yoga. Distributors have embraced the Web to sell current and backlist titles, while independent producers hope it will increasingly provide much needed exposure for their work.
‘The Internet has lowered the barrier for entry, and that’s why so many companies are going on the Web to sell documentaries,’ says Rob Sussman, chief financial officer and head of development for The Sundance Channel, which runs a companion Sundance Filmstore (sundancefilmstore.com) featuring over 200 films, including about 40 theatrical docs.
On-line selling is the fastest growing class of trade in the video business. One site, onvideo.org, lists over 60 links to websites that sell specialty home videos. ‘The notion that through a very low cost medium you can make available to a targeted audience programming that appeals to them powerfully is a great one,’ says Peter Edwards, president of Acorn Media, a Maryland-based distribution company.
Distributors now have multiple opportunities to sell their videos on the Internet – via company websites where they offer their products for sale directly to consumers, and through deals with on-line retailers. WinStar TV & Video maintains a modest direct-to-consumer business to support its labels, but prefers to put its energies and knowledge about its product into the hands of its marketing partners. ‘The idea is to put our assets at the disposal of the people who are already in the business, and use that as a way to grow our on-line business rather than try to be another Amazon,’ says Al Cattabiani, president, WinStar TV & Video.
First Fun Features, a New York-based production and distribution company, maintains two websites, one for its First Run Icarus Films division, which offers over 800 documentaries to schools and libraries, and one for its specialty, independent and documentary films (firstrunfeatures.com). ‘Having our catalog on the Internet has been important to show other catalog companies our wares, but also to show producers and agents the types of films we have,’ says First Run Features president Seymour Wishman. Despite First Run’s own on-line presence, companies like Amazon are more important for its Internet consumer marketing strategies because of those retailers’ expertise, efficiency and ability to sell at a discount.
Broadcasters get a piece of the action
Creators of documentary programming and on-line content – like A&E, Discovery and PBS – rely on their own sites equally or greater than the on-line retailers to sell the titles in their catalogs. The advantage of selling at their own on-line stores is that they can surround the home video with editorial and promotional content that builds upon the viewer’s television experience and reinforces a desire to own the program. Many companies have either recently begun or are developing the capability to show clips of videos on their websites.
‘The Web is a great merchandising environment because you can merchandise directly to users,’ says David Walmsley, director of home video, A&E Television Networks. ‘Instead of calling an 800 number and asking about war programs we have, they can go to the website, see the listings, look at the packaging and have in-depth information at their fingertips.’
Discovery’s on-line store is the only site on the Web that has all home video titles from Discovery channels, including Animal Planet, The Learning Channel and The Travel Channel. Discovery creates on-line boutiques centering on event programming, such as Eco-Challenge, using the home video as the driver for the potential sale of other merchandise related to the programming. ‘The Internet allows us to place videos in context,’says Jackie Chorney, director, E-Commerce, Discovery Interactive Media. After watching a show on-air, viewers can go on-line to get a richer, deeper experience regarding the program’s content, and keep it by purchasing the video. Conversely, people on-line interested in a particular topic or theme who may not have watched a particular program can find videos relating to the topics that interest them.
pbs member station WGBH Boston, which produces series like nova and The American Experience, has seen strong growth in sales of its backlist titles on-line. Traditionally, WGBH tried to get extended life from backlist titles by promoting old programs related to current movies (i.e. Titanic), or bundled them with similarly themed titles. Sarah Slater, director, WGBH Boston Video, says that the company is still learning how to best take advantage of the new promotional possibilities that have arisen from the demand for backlist titles on the Web. Sundance, through its on-line store, is accomplishing that by promoting its videos with copy, articles and in-depth film descriptions taken directly from catalogs produced for the Sundance Film Festival, unavailable elsewhere.
Just as video distributors look to find logical points of distribution at museums and other locations, the vastness of the Web offers similar opportunities to find logical marketing partners with which to link up to in order to target specific niche groups.
Amazon.com’s Associate Program allows anyone with a website that isn’t able to handle secure commerce transactions to link to its video store and let Amazon take care of it. For example, a website about aviation history may want to offer related videos for sale. The user is routed to the Amazon site to complete the transaction. Associate participants get a commission of five percent.
‘E-commerce is a tricky thing to pull off,’ says Jason Kilar, group product manager, video, Amazon.com. ‘The trickiest thing is to gain the trust of the consumer.’
The growth of the numerous on-line home video retailers has created an environment in which the price of videos will remain low and where an educated consumer can do a quick search to find the lowest price.
Both Amazon.com and Reel.com guarantee the lowest prices on videos, with prices for docs already starting about ten percent off the list price at Amazon. Fierce competition between the leading retailers is forcing them to aggressively differentiate themselves from each other – Amazon through volume, price and selection; Reel through editorial content and movie industry coverage; and Documall.com by focusing solely on documentaries.
‘Our [movie] content is more precise and database is bigger,’ boasts Dave Rochlin, coo, Reel.com. Because it only deals in movies, the company feels it understands and speaks to movie audiences better than any other retail site. Originally launched in 1998 as a content site, it augments its videos with articles and features that may help consumers with purchasing decisions.
Even more specialized is Documall.com. (For more on Documall.com, see the May 1999 issue, or search www.realscreen.com.) The doc-only retail site offers non-fiction programming that has aired on tv. ‘Docs represent a sub-level [to the Amazons of the world] that is a relatively small piece of the business,’ says Documall CEO Jonathan Greenberg. ‘To us, it represents an underserved market.’ Documall offers over 300 programs that have aired on stations like PBS, A&E and The History Channel.
A new mode of distribution for indie producers?
On-line retailers are also interested in developing ways to work with independent producers unable to find distribution deals. Documall’s Greenberg says that his company is several months away from being able to establish such a system, but is committed to finding a solution to expose independent filmmakers over the Internet. Similar discussions have been held at Sundance Channel to license such films for broadcast and later for release on home video. Sundance does not expect any movement in this direction until the end of the year.
Amazon is considering extending its Advantage Program to independent filmmakers. Advantage is a program that allows writers and bands that don’t have a label or representation to sell their books or CDs on consignment via Amazon, given they provide the retailer with inventory and promotional materials to help merchandise their products on the site.
Then again, technology may co-opt everyone. Since technology on the Web seems to change as fast as the weather, the sale of home video, vhs and dvd on the Internet may just be the first step of a new distribution system in which the content may be downloaded directly, much like how MP3 and other Internet delivery formats are revolutionizing the music industry today. ‘The Internet is an even playing field for the distribution of information,’ Documall’s Greenberg says. ‘It’s the first time that people have the access to sell their information and content to people who want to buy it through a common carrier type.’
VSDA: the facts
Like most other entertainment businesses, the home video retail business is facing many changes. The growth of DVD, the immediate opportunities and long-term threats caused by the Internet, and the constantly shifting relationship between studios, suppliers and retailers make this year’s Video Software Retailers Association (VSDA) a chance to express concerns and discuss growth in a rapidly changing environment.
Held July 8-10 at the Los Angeles Convention Center, vsda will feature 25 seminars and two general sessions, including one on buying options, considered the hottest topic in the industry today. Other key topics include copy depth, pricing and distribution options. There are no documentary or special interest-specific seminars.
Over 10,000 people from over 20 countries attended last year’s vsda in Las Vegas, and similar numbers are expected this year. The conference is typically attended by video retailers, home video divisions of movie studios, video game and multimedia producers, and other businesses related to the US$16 billion home video entertainment industry in the U.S.
Docurama: new home video label just for docs
What Miramax brought to independent film in theaters, Docurama hopes to bring to documentaries on home video.
In April, New York-based distribution company New Video launched Docurama, a new home video label dedicated to classic and cutting-edge documentaries.
New Video president Steve Savage believes that documentaries are at the same point today as independent films were ten years ago. The growing interest in docs at film festivals, greater exposure and acceptance of docs by the public via cable outlets like A&E and The History Channel, and an interest in long-form non-fiction books, all indicate that there is a growing market for documentaries, he says.
New Video serves as the distributor for TV-based docs from A&E Home Video, The History Channel, and NBC News, among others, but the Docurama label concentrates solely on theatrical films. Its first release, Some Nudity Required, is a look inside the B-movie industry. The film (produced by L.A.-based Only Child Productions) screened at Sundance.
‘From our perspective, Some Nudity Required shows what documentaries can do,’ Savage says, ‘because it plays to the documentary film audience but also plays to the average video store patron familiar with B-movies.’
New Video has been aggressively working with video store retailers to position Some Nudity Required both in the documentary section and B-film section by offering the film to retailers on a ‘buy one, get one free’ pricing promotion of US$59.95.
Savage makes no excuses for the commercial sensibility of Docurama’s first release. ‘We’re not just looking for snooty little serious docs; we’re looking for things that really open up the genre. We’ll be coming out with some things that will be commercial and some that won’t.’
The company expects to have 12 titles released by the end of 1999 (Docurama’s second release, Off the Menu: The Last Days of Chasen’s, debuts August 31) and plans to release 18 a year beginning in 2000. It has made a hit list of what it feels are the 600 best documentaries ever made, in the hopes of gaining distribution rights to build a backlist. New Video has been negotiating with studios to sub-license docs from their libraries. ‘We’re a niche player,’ Savage says. ‘The power of a niche player is that you focus in on an audience and a product – that’s something the studios can’t.’
Savage is convinced that documentaries are poised for a commercial breakthrough, a big change from the days when he wasn’t allowed to use the ‘D’ word in any promotional materials, and instead used phrasing descriptions such as ‘a riveting story about…’
Later, he adds, ‘The metaphor is that Eskimos have eight words for snow because they are really into it. The documentary genre is so big and wide that we’re hoping people really get into docs and stop thinking of them as one big catch-all.’
TO DVD OR NOT TO DVD?
Docs have been a latecomer, but the genre and format may be a perfect match
As it becomes clearer that the DVD format is not only here to stay, but may eventually send VHS the way of vinyl, studios, producers and distributors of special interest home video, documentary features and TV non-fiction are assessing whether or not to make the move to DVD.
There are currently over 1.6 million DVD players in U.S. homes as of the first quarter of 1999, with projections of 3.3 million by the end of the year, according to statistics provided by the DVD Video Group, an industry-funded non-profit corporation. The organization estimates that ten million discs were sold in the first quarter of 1999.
The first generation of DVD releases centered around action and sci-fi movies, the types of entertainment preferred by early adopters. Of the over 2,500 current titles on DVD, the association lists only 107 as documentary titles. As DVD players go mainstream, a need to develop a greater breadth and depth of genres is arising. Fitness, wildlife, history, music and sports dvds are trickling into the marketplace.
DVD’s clearer picture, enhanced sound and ability to store large amounts of data make the format ideal for special-interest programming. ‘For information retrieval, it’s a great platform for the home user,’ says David Walmsley, director of home video for A&E Television Networks. The extra storage capacity allows room for additional content and options like a second program bundled on for added value. Chaptering allows the user to immediately advance to a certain section of the disc as opposed to fast-forwarding, while freeze-frames are crystal clear, as opposed the VHS’ wobbly picture when paused.
DVD makes sense to a company like National Geographic because it is the home entertainment delivery option that best presents the company’s noted photographic images and production values, according to Catherine Hagney, vice president of domestic home video for National Geographic. National Geographic plans to release its first DVD title in the fourth quarter of 1999.
While companies like A&E and National Geographic are dipping their toes in the water to test the market, others remain hesitant. Discovery Channel is taking a more conservative approach and has no plans to release any titles on dvd in the short term. A&E’s first release on DVD is a compilation of the old Avengers TV series. Boston-based public television station WGBH is releasing its first two DVDs, Miracle of Life and Everest: The Death Zone, in June. Video distributor Acorn Media has plans for its first DVD releases in 2000.
‘We’ve waited until there was a critical mass of players in the market to make it economically feasible,’ says Sarah Slater, director, WGBH Boston Video. ‘Early adopters are not our traditional market.’
Other companies have taken a leap of faith in the technology, hoping to get out in front of potential competition. In May, Sony Wonder SMV released the first fitness dvd, Kickboxing Workout, featuring Kathy Smith. ‘We have the opportunity to be an early entry in a genre of product,’ says Wendy Moss, senior vice president of marketing, Sony Wonder SMV, hoping the notoriety establishes the Kathy Smith line as the brand leader in DVD.
The advantage of a fitness DVD over a VHS tape are the extra features embedded in DVD, such as the ability to pause the disc to check your form, the ability to customize workouts based on fitness level and intensity, multiple angles which allow the user to perform the movements properly, and music-only and instruction-only tracks. Moss likens the DVD experience to having a personal trainer in your home. The kickboxing DVD is priced at US$24.95.
‘Retailers have been enthusiastic because they have been growing their dvd shelves and they want to have a variety of properties to broaden the breadth of their product mix,’ Moss says. Sony has plans to release an MTV Grind exercise dvd in October. Its Grind Workout Hip-Hop was the best-selling fitness home video of 1998, according to VideoScan.
The speed at which DVD has been accepted has surprised even the most seasoned industry veterans. ‘Going into the fourth quarter of 1998, if you polled the average person in the video industry, half would say DVD is going to be the next laser disc, and half would say that the dvd is going to replace VHS,’ says A&E’s Walmsley. ‘The fourth quarter of last year proved that DVD has the chance to be the next primary platform.’
Om Video: Holistic goes mainstream
Piggybacking on North America’s growing fascination with alternative health options, producers of what were once considered New Age-fringe videos have been experiencing lots of positive karma.
Starting about two years ago, titles on self-help subjects including yoga, massage, meditation and relaxation have been transcending from special interest direct mail catalogs to general retailers.
The surge of interest in mind-body-health programming has grown in concurrence with mainstream acceptance and curiosity regarding alternative health and wellness enhancing tools that compliment standard Western medicine. Sales in alternative medicines topped US$27 billion in 1998.
‘As baby boomers age, they become more interested in the `big questions’ both on physical levels – `How can I have a long life and stay healthy?’ and philosophical questions – `Who am I, Why am I here…Where do I fit in the big scope?,” says Al Cattabiani, president, WinStar TV & Video, who launched Wellspring Media, a label specializing in holistic practices, six years ago before it was absorbed into WinStar last September.
In the fitness area, a growing portion of an aging baby boom generation that has been stepped, jazzercised, jogged, kickboxed, spun, toned, flexed, pumped and Taeboed to extreme is turning away from feeling the burn. The trend now is towards gaining strength and relaxation through practises like yoga and Tai Chi as they strive to live longer, healthier and pain-free lives.
Houston, Texas-based Living Arts has been the leader in yoga tapes, tapping into about 70% of the market, according to Living Arts vice president of sales, Lori Self. Its Yoga Practice for Beginners has sold over a million copies, was the number-three selling title last year in the fitness genre and ranks ninth in 1999. It’s A.M. Yoga for Beginners and P.M. Yoga for Beginners rank sixth and eighth in sales in 1999 (through May 9), according to VideoScan.
Wellspring has over 60 titles in the alternative health genre, ranging from meditation (Alan Watts: The Art of Meditation) to Tai Chi to ‘practical spirituality,’ such as Speaking with Your Angels. Cattabiani adds that the company is expanding into other new trends, including natural pain relief, natural approaches to beauty, increasing a baby’s intelligence through holistic techniques, and science and the power of prayer.