DVD imports put pressure on video hire outlets

By Keith Newman

Columbia Tristar, one of the country's top movie distributors, is warning video hire outlets to stop renting out parallel imported digital video discs (DVD) and video titles ahead of the official release time or they will face prosecution.

About 400 letters have gone out to the major rental chains and independents this week asking them to take offending movies off the shelves.

Currently, video rental stores are guaranteed a four to six month "window" after cinema screening before videos and DVDs are available for sale, pay-per-view, pay TV and free-to-air broadcast.

"People pay a premium for those windows. Without them the whole industry wouldn't exist," said Columbia Tristar general manager Andrew Cornwell.

"Up until now we've been happy to let the industry police itself, but in some cases people are now renting or releasing prior to the theatrical date," he said.

The Business Herald understands the Columbia Tri-star stand is about to be followed by Universal, Roadshow and other distributors.

At least nine companies import DVDs in large quantities from the United States for distribution to rental and retail outlets. Russell Clark, director of Video Ezy, the largest rental chain in the country with 106 outlets, said all major video chains and distributors met soon after parallel importing was introduced in May last year and agreed to stick with the official New Zealand release dates.

"Two or three of the chains broke that promise and because some of our stores were disadvantaged we took on stock as well. We realise there's a problem now but we can't back away from it." Some stores earned about 4 per cent to 5 per cent of their revenues through DVD rentals, he said.

Children's movies Rug Rats and Mighty Joe Mouse were both available in video stores ahead of their official release dates.

Now Mr Clark is hoping to rebuild a united front. Yesterday he sent a letter to all video outlets and distributors asking for their schedule of DVD and VHS releases over the next six months in the hope everyone can release concurrently.

"We will stop importing product three months ahead of time if other video hire chains, electrical stores and independents stop renting DVD."

He said New Zealanders were quick to catch on to DVD and wanted to rent movies at the same time as the US got them.

"If the studios were able to release VHS and DVD titles simultaneously with the US, there wouldn't be a problem."

He said the video rental industry relied on the release window to build up market demand.