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Tue, Jul 17, 2007 - Page 10 News List

Retailers set to introduce DVD-on-demand service

NY TIMES NEWS SERVICE , NEW YORK

In a seller's ideal world, the product is paid for first, then manufactured and shipped. The sellers of TV programs on DVD are trying to create that world: ABC Television, Amazon.com and a subsidiary, CustomFlix Labs, a DVD manufacturer, announced last Thursday that they were going to make shows from the archives of ABC News available on demand.

So when a history buff wants to buy a DVD about the assassination of US president John Kennedy or the wedding of Prince Charles and Lady Diana, they will order it on Amazon.com or ABC.com, pay for it, then wait two or three days for delivery.

The DVD will be copied from digital files stored at CustomFlix only when the order has been placed and the seller incurs none of the costs of inventory and warehousing.

The market potential for on-demand DVD sales is considerable. For Amazon alone, projected sales of DVDs should be just under 5 percent of its US$7.6 billion domestic sales revenue this year, said Aaron Kessler, a senior research analyst at Piper Jaffray.

On-demand doesn't make sense for books, he said, but it does for infrequent orders on DVD or CD.

Amazon would not release sales figures or characterize the portion of its on-demand DVD sales, beyond saying it was a "small percentage."

But the company has great expectations for the on-demand market.

"We've already gotten a lot of interest from the major film studios and TV networks to use this as a way to make their catalog titles available to customers," Sean Sundwall, a spokesman for Amazon, said.

For ABC, on-demand sales are a way to make money with no additional investment beyond the cost of digitizing its archives.

Some 300 titles are available, including daily news coverage, celebrity interviews by Barbara Walters, special reports and segments from Nightline and 20/20. CustomFlix also has titles from CBS, NBC and PBS.

The on-demand market is inexpensive for the vendor and flexible for the consumer. Customers, for example, can purchase entire CBS shows or select interviews, like clips from 60 Minutes.

"If the networks had to do a print run of 5,000 copies and guarantee sales, a lot of these titles would never come to light," said Darren Giles, co-founder and chief technologist at CustomFlix. "In many cases, this is the first chance people have to see this content in decades."

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