Unlimited virtual shelfspace? (What’s the catch?)

It sounds good. E-commerce video sites offer almost limitless virtual shelf space for indie and niche kidvid producers trying to wedge a toe in the U.S. market door. But while Web site operators push the pros, some independent producers are saying...
October 1, 1999

It sounds good. E-commerce video sites offer almost limitless virtual shelf space for indie and niche kidvid producers trying to wedge a toe in the U.S. market door. But while Web site operators push the pros, some independent producers are saying that if this new distribution platform has any real benefits, they still lie somewhere in the future.

Still, everyone seems to agree that video e-tailing will inevitably demand more attention. Total 1999 U.S. on-line video sales are projected at US$300 million in a report by Massachusetts-based Forrester Research. The report goes on to predict that 12% of all videos will be purchased on-line by 2003.

Dave Rochlin, COO of, says with 100,000 titles, shelf space at his vendor site is unlimited, and that should appeal to independent producers. ‘The new Disney movies get most of the shelf space [in retail stores],’ he says, ‘but the Internet gives international companies the chance to get their product out.’’s VP of marketing Donna Williams says the video market is highly fragmented, and the Internet gives a retailer ‘a broader distribution of titles and ability to niche market on the Web.’ So far, the company’s top kidvid sellers include such niche fare as anime hits My Neighbor Totoro (produced by Japan’s Studio Ghibli, distributed by 20th Century Fox Home Video) and Kiki’s Delivery Service (produced by Studio Ghibli, distributed by Buena Vista Home Video).

Both on-line retailers say their strength lies in the ability to sell hard-to-find videos you can’t get at your local store. ‘We get a constant barrage of calls from producers who want to support and sell their product, who see the Internet as a strong channel for that,’ Williams says.

A scroll through both and sites reveals a prevalence of big-budget titles front and center on the respective kids pages: even has a ‘Disney Pick’ section. Still, both sites offer non-U.S. titles, such as U.K.-based HIT Entertainment’s Kipper series, Britt Allcroft’s Thomas the Tank Engine and Friends series and Canada-based Nelvana’s Little Bear. They also offer retro vids, such as a rerelease of the original The King and I (1956) and Rikki-Tikki-Tavi (1975).

Even though HIT has had some success selling Kipper videos on U.S.-based e-vendor sites, CEO Peter Orton says on-line currently makes up a small fraction of overall sales. Orton says HIT is more excited about launching its own sites. The company will launch a Bob the Builder site in October, followed by a Kipper site in November-but don’t expect to be able to purchase titles there for at least 12 months. ‘We have put an infrastructure in place to do e-commerce sometime in the future, but it’s a huge investment, and it would take our eye off the ball of creating properties,’ he says. Orton sees the Internet as ‘a wonderful opportunity to communicate with the consumer,’ but feels there are a lot of hurdles to overcome before e-commerce is a viable route to take.

Louis Fournier, VP of sales and co-production at Montreal-based Cinar, says it’s too early to tell if e-com sites will have a positive effect in the kid video business. For now, Cinar is not about to take the bait. ‘Until we know where it’s going, we’ll keep that card in our deck,’ Fournier says. ‘I have yet to see meaningful revenue being derived from it.’

But what about sales of titles long relegated to the catalog? ‘That’s where e-com will hit the mark,’ Fournier says. But even with catalog sales, the title has to have some stature. ‘If it’s an obscure property, even if it’s in the catalog, there may not be sufficient money generated to keep it there,’ Fournier says.

London-based Carlton International’s head of video Simon Wheeler points out the issue of rights as a stumbling block to overcome in e-commerce. ‘If someone’s ordering from America, how does that effect the German retail market?’ he wonders. ‘It’s a side issue, but something that people are beginning to think about.’ In general, however, he is optimistic about the possibilities of e-com for non-U.S. producers. ‘It’s a good way for consumers to get hold of products from overseas. I think it’s going to grow and grow,’ he says. Carlton is ready if it does, with videos already available through

Dominic Rayner, head of home video at London-based ITEL, says ‘there’s nothing yet in terms of a synchronized launch on the Internet’ planned at ITEL right now. But it’s just a matter of time, Rayner believes, until people get used to on-line purchasing in general. ‘A lot of people are still a little cautious about using the Internet. They’re not going to type in their credit card number at the moment-there’s still a hesitance there. But I am positive about the Internet,’ Rayner insists. ‘Maybe not today, but in the future.’

Some companies are clearly not worried about ironing out the fine details of e-commerce before charging ahead with kidvid sales on-line., a Bandai Entertainment video e-com site operating out of California, bills itself as the first retailer in the U.S. to market Japanese animation to consumers exclusively through the Internet. Launched last September, it boasted 5.4 million hits in its first month alone. Director of sales and marketing Nobu Yamamoto says the site garnered sales of about US$500,000 during its launch period, when it was the only outlet for Bandai anime in the U.S., with sales continuing to do well following the wholesale introduction of Bandai’s anime product to the U.S. last January.

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