Retailers, Studios Link Up For DVD Push

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November 12, 1998 (4:33 PM EST)

By Andy Patrizio,

Consumer-electronics retailers and video-rental outlets are banding together to promote DVD for Christmas shoppers.

Retailers Best Buy, The Good Guys, and The Wiz are teaming with DVD vendor Toshiba, video-rental chains Hollywood Entertainment and West Coast Entertainment, and movie studios New Line Home Video and Warner Home Video for a series of DVD consumer promotions.

The campaign runs from November 15 through December 31. Consumers who purchase any featured DVD player at Best Buy, The Wiz, or The Good Guys will receive five free DVD discs and coupons for 13 free DVD rentals at Hollywood Entertainment or West Coast Video stores.

"DVD is one of the most successful new products in consumer-electronics history," said Jim Cardwell, an executive vice president with Warner Home Video. "The fourth quarter is the prime selling period for consumer electronics and these promotions position DVD players as the holiday gift for 1998."

Initial DVD sales have far outpaced those of compact discs and VHS. "Our research shows DVD will be a big-selling product this holiday season," said Gary Shapiro, president of the Computer and Electronics Manufacturers Association. This promotion is one of the largest ever, said Shapiro.

The deal expands on a previous pact between West Coast Video, Warner Home Video, and The Wiz, announced last week. As part of that deal, customers can rent DVD players from West Coast Video and get the movies for free and incentives to purchase a DVD player at The Wiz.

That effort was largely undertaken in the New York area, where The Wiz is based and West Coast Video has a large presence. By adding Best Buy and Hollywood Video, the promotion now has a national reach.

The partnership is also a who's who of the most vocal opponents to Divx, the pay-per-view DVD derivative developed and championed by retail giant Circuit City. Toshiba, Warner, and Best Buy have pulled no punches in bashing Divx at every opportunity.

However, West Coast-based retailer The Good Guys is a Circuit City partner. The chain was the first to align with Circuit City and sells the Divx player in its stores, a fact not lost on one analyst. "This could be another nail in Divx's coffin," said Kevin Hause, with International Data Corp.