CHATSWORTH, Calif. - Pure Play Media CEO Richard Arnold has issued an official response to concerns and criticisms regarding the company's new business model, direct-to-retail (D2R) distribution.
Pure Play represents such leading brands as Private, Homegrown Video, Seymore Butts, and The Score Group. The D2R business model, launched Aug. 1, means that Pure Play has bypassed the established network of adult video distributors and wholesalers to sell product directly to stores.
Arnold drafted the following Q&A response to recent postings at adult websites including pornnewz.com and GFY.com.
Online Comment: In reading this announcement (Pure Play's move to selling retailers only) my first thought was to review which studios are on that label - so I could identify which studios we would no longer carry - and begin developing our dis-information reason to give to our customers.
Arnold: This comment drives me crazy on a couple of levels. The first is my amazement at this particular retailer's underestimation of the knowledge and sophistication of their customers. The facts are: most consumers frequent several competing retail operations, so trying to fool them into believing anything but the facts is ridiculous. A consumer will go to the retailer that carries the product that they desire. Secondly, there is a huge underlying issue with the statement that seems to plague our industry, and that is deception. Rather than tell a consumer the truth, deceive them into purchasing or consuming something that they may not want. There seem to be entire product lines that cater to this edict, which in the long run only really accomplishes the goal of driving away the consumer.
(Pure Play will) most likely lower prices to retailers.
We will pass on lower prices, but moreover, we will be able to offer specials and incentives, that we simply could not offer through wholesalers.
When a retailer reorders a title, it is nice to get them in a single shipment, instead of one or two and the added shipping cost. Many retailers do not purchase from multiple sources to save shipping costs.
We understand this is an issue and have tried to make things as easy as possible on the retailer. We changed our release schedule from two separate days per week to one, and have added a free DVD with each shipment to help offset the costs. We also know that most retailers stock different (non-DVD) items and are used to multiple shipments to their store.
Many retailers do not like writing individual checks.
Perhaps, but we think retailers want to purchase from the best source, at the best price and receive the best product knowledge. Check writing, while not fun, is probably not their biggest challenge.
Many stores depend on distributors to select the "hot" titles.
I think the role of the distributor has changed dramatically over the last few years. It has been our experience that wholesalers seem most concerned with the price of a product and if given a great price, sales of that particular product increase (temporarily), with these sales increases only seeming to last until the wholesaler receives their next deal. There certainly does not necessarily seem to be a correlation between "hot" titles or quality titles and these sales bursts. The other aspect of the wholesaler that has changed more recently is the fact that a lot of them either produce their own product line or exclusively represent studios. How could they make unbiased product recommendations under these circumstances? The bottom line is that there is loads of information readily available to retailers for them to make their own, unbiased purchasing decisions. We are in a position to provide retailers with a great cross section of studios and titles and will have information, POP and customized incentives to back up these studios.
(Pure Play will have to) increased sales force, increase shipping (personal), increase collections.
We have increased our sales staff significantly, but we are also improving and modernizing how we make a sale. We recently upgraded our accounting software and have added a complimentary sales software that will help our sales people remember important factors about our customers, such as: buying frequency (so we don't over call them), customer demographics (so we sell them product best suited for their store), purchase history (so we have the customers knowledge at hand) and anything else that will help our interaction with the customer be more personal.
We also plan to increase shipping personal, if required. Recently we moved into a new state-of-the-art facility in Chatsworth, so adding staff as required is no problem. An interesting side point that we have noted; when we sell to wholesalers, they constantly return goods that just come off of being a new release and processing the return actually takes about 3 times the amount of time and energy as a new order, whereas we take very few returns from our retail customers. We feel that the increase staff that we will need for D2R will be somewhat offset by the reduction in staff needed for processing returns.
We may have to increase collection efforts, but we find that we are calling the same 20 or 30 accounts constantly, so maybe by calling a few different accounts, our collections staff will have a more interesting day.
Many stores are lazy and do not have the time to hand pick through 1000+ new release DVDs that are available per month. That is where the distributor comes in.
I have addressed this comment earlier by explaining how the role of the distributor has changed. The real issue is the comment about retailer being "lazy". We do not think retailers can afford to be or are lazy in today's
environment. We believe they want the best product for the best price, with the best service and knowledge and that is what we can absolutely deliver to our customers for the studios that we represent.
For more info on Pure Play Media and D2R, visit pureplaymedia.com.
