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Columbia House Seeks to Corral DVD Market

Columbia House set its sights on becoming a key player in the DVD industry this month by debuting a club that targets DVD owners.

Hoping that digital video discs will become the hottest medium to hit the at-home entertainment industry since CDs, the company began targeting new members with two response print ads with a “two for $4.95 offer” and a toll-free number. The ads debuted last week in high-profile publications such as Premiere and Entertainment Weekly. Membership requires the purchase of four additional titles at regular prices over the course of two years.

“We tried to create an offer that customers can respond to,” said Brian Wood, executive vice president at Columbia House Video.

One ad ran as a standard club ad showing movie titles on DVD and featuring a response card. Another positioned the club's debut, also with a response card. Both featured the toll-free number, 888/CHC-DVDS.

Columbia House, New York, maintains a video club with laser disc and video titles and a video library of television shows. The company declined to disclose membership figures.

BMG Direct, which also operates music and video clubs, said it has no immediate plans to launch a DVD club.

Columbia House will issue its first DVD-dedicated mail campaign later this year once membership levels reach a level that the company declined to disclose.

“It's hard to judge,” Wood said. “The fact of the matter is that these clubs start out very small and, in time, you build up membership. Clearly, we will offer DVD membership to existing members in other Columbia House clubs. The music club mails to members every three to four weeks, and we can ride along with those mailings. This is sort of the initial release, and we will look at the results to see what is the appropriate next step.”

Wood estimated that 200,000-300,000 DVD players are in U.S. homes and that owners primarily are high-income males. To that end, Columbia House is promoting action-adventure movies such as “Twister” and “Air Force One” in the ads. Among those targeted for membership are enthusiasts of laser-discs, which peaked at between 1.5 million and 2 million households more than two years ago, Wood said.

“These people will be the first converters,” he said. “The benefits of DVD are provided in terms of visual quality and sound and are ideal for home theater. But I don't think this will be just the laser people — it will become pervasive at some point. When it breaks the threshold of laser disc, it will be headed to being the dominant format.”

Club sales for video and music have slumped in recent years with more at-home viewing options available through cable and a continued increase in box-office sales and theater construction.

Last fall, Columbia House acted as the fulfillment house for a Philips Consumer Electronics Corp. infomercial that introduced its DVD player into the market.

“Columbia House's image is not one of a cutting-edge company,” Wood said. “When consumers see that Columbia House is offering these, they will see that DVD is a real product. This will help establish DVD as a format in the industry. We are spending massive amounts in advertising where we would not normally spend.”

The DVD club will feature 500 movie titles.

“You don't find many stores with a selection featuring this many titles,” Wood said. “One of the concerns with DVD technology is that when customers buy a machine, they want to know if they can get the titles they want. That is one of the advantages for customers — the industry is assured there is a supply and customers can access the [movie titles] no matter where they live.”

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