I had one of those conversations last week that pretty much distilled the current state of the dvd business to its ever diminishing essence. A British Rights holder of children's animation, some of it pretty well branded, is trying to find a new home for his label before the very well known American distributor of his product completes its downward spiral to bankruptcy and oblivion. I've known of this Brititsh company from a distance as we both attended many of the same nternational sales markets over the years. Let's just say that they were real players. I have known the dvd distributor in question, both in previous incarnations, and now in their present form, for at least eight years. They too are/were serious players. The gist of their break-up and the financial struggles of the distrib are based on the simple fact that they couldn't get consistent shelf space for this animated product in general retail.

Like every other independent dvd label, my company has run into the same problem on an ever increasing basis. Retailers just won't stock moderately successful dvd titles like they used to. The retail shelf space that made dvd so profitable is simply gone.

There is debate over whether this trend is based on the fact that the retailers literally can't afford to devote shelf space to product that earns them maybe $12.00 a sale, or whether that product simply doesn't sell enough to justify itself. Either way its kind of six of one or a half dozen of the other. The end result though is the loss of the impulse buy, or even the educated browsing sale, because if dvds are pretty much only available on the internet, then it becomes very hard for any one of them to achieve name recognition at a level that justifies the dvd marketing costs neccessary to achieve it. The end result is sales volume that simply can't support the business model, which means the end of the business model.

My British caller and his doomed distributor had run face first into this miserable reality. Until merchandisers and distributors come up with a cost effective way to present new dvds to the public, there will be an ever diminishing selection of films that can actually make money for the participating parties. Independent films, animated films, basically most titles that don't have the economy of scale of a studio dvd marketing effort behind them will be relegated to relative obscurity. Film fans can still find interesting and even great films out there. But unless they want to accept only what the studios and mini-majors are offering, they will have to assume more responsibility to seek these films out.

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