Published:
26-Jan-10
Australian franchiser Franchise Entertainment Group (FEG) - responsible for Blockbuster, Video Ezy and EzyDVD brands - has lodged a complaint with the Australian Competition and Consumer Commission (ACCC) over DVD price promotions offered by Wesfarmers-owned supermarket brand Coles. The dispute centres on a promotion of Disney's
Up which the supermarket is offering for A$9.00 ($8.30) to consumers that spend over A$100 ($92.40). FEG claims aggressive supermarket price promotions are luring customers away from video rental stores. Coles has previously run similar price promotions on Fox's
Ice Age 2: The Meltdown and Warner's
Harry Potter and the Half-Blood Prince.
Our take...
The fact that a pricing strategy that is already standard procedure among mass merchants in the UK is considered serious enough in Australia to spark an official complaint, reflects both the relative under-development of the home entertainment retail business and the continuing strength of the country's rental market. However, Australian retailers have not been able to squeeze prices to the same degree as in the UK. Boosted by the popularity of TV DVDs, Australian average retail DVD prices have grown eight per cent in the past three years; the more aggressive retail environment in the UK has caused average prices to decline by 30 per cent in the same period. Meanwhile, rental - which accounts for eight per cent of DVD spending in the UK - generated 27 per cent in Australia in 2009.
