A carousel of changes for the home video biz


Rip Van Winkle could have just awakened after a 10-year sleep and not had a clue about what happened to home video. Ten years ago, VHS still ruled the day; studios were debating not if but when to implement rental pricing for this new format called DVD; and Hollywood was so concerned about the troubles at Blockbuster that they rolled out a whole series of plans and programs that would help that chain and other rental dealers bring in plenty of copies of the hits on the cheap to satisfy demand.

Today, rental is an afterthought to most studio executives, and VHS has been dispatched from even the most rural Wal-Marts. And the hottest topic of conversation is how to manage the "supply chain" -- a broad term for the channel between replication facility and the consumer -- in the face of declining DVD sales and gobs of uncertainty about the looming transition to digital distribution.

The job of a studio executive has changed dramatically in the past decade. Sure, he or she is still doing a fair amount of schmoozing with key retailers, from flying to Minnesota to meet with Best Buy and Target execs to touching down in Bentonville, Ark., for one of those beloved Wal-Mart bus tours. But technological advances have made it possible to know as early as 6 a.m. on street date whether you've got a hit or a miss on your hands. And the rest of the day is spent carefully tracking sales and replenishing orders here and pulling stock there to maximize that opening six-day period when, typically, more than half of sales occur.

We're in the middle of a particularly busy time for the home entertainment industry. We've just finished the annual Home Entertainment Summit, the Entertainment Supply Chain Academy and the annual Entertainment Merchants Assn. convention. Studio executives are stretched tighter than ever because of the flat market, which already has led to cutbacks, layoffs and longer hours for the staffers who remain.

The quest to make money is still foremost on everyone's agenda, but in this rapidly evolving business environment, there's another, perhaps even more important, objective: to keep up with all the changes the business has undergone and to be prepared for even more changes in the future.

Home entertainment is in the fast lane now. If you're not up to speed, you won't just be left behind, you'll likely be run off the road.