UK video firms face Blockbuster threat

TWO of Britain's biggest video distributors, Carlton and the Rank Organisation, face a serious threat from a secret weapon being tested by Blockbuster Entertainment, the world's largest video rental group.

Blockbuster is looking at a laser copier that could enable its shopkeepers to duplicate videos on their premises rather than stock cassettes from companies such as Carlton and Rank. All Blockbuster has to do is negotiate the copying rights with the studios. If this works, the new technology threatens to wipe out more than a third of Carlton's profits and about 15 per cent of Rank's.

The system being tested at Blockbuster's headquarters in Fort Lauderdale, Florida, is designed to duplicate a video within a minute of a customer requesting it. The company could store master films in a data bank rather than having to stock recorded films.

If successful, installation of the duplicating machines could start by the end of this year in Blockbuster's 2,000 US stores and by next year in its 100 stores outside the US.

Blockbuster currently buys 17 per cent of all the videos made in the US. If it began duplicating its own videos there would be no need for them to be produced by the huge video duplication plants owned by Carlton and Rank. The two British companies copy cassettes under contract from large Hollywood studios such as Fox and Walt Disney.

Carlton is the largest player in the market. It bought the video duplication group Technicolor in 1988 for dollars 780m. Last year, its combined video and music duplication business made pounds 46.6m out of total group profits of pounds 102m. Rank's film duplication business is not quite as large as Carlton's, but it still contributed pounds 27.4m to Rank's profits of pounds 186m last year. David Lundeen, Blockbuster's head of corporate finance, said his company already has the technology to store films and music in a digital form at its Florida headquarters. It also has electronic links to its outlets, and machines that can copy compact and laser discs in seconds. They can even copy labels for packaging the music, he said.

Until now, however, video cassettes have been a problem. 'The trouble was we could not do the copying fast enough,' said Mr Lundeen. 'It was taking an hour to do the copying, which was no good for us.'

Blockbuster is keen to press ahead with the technology, because it has stock control problems. It buys lots of copies when films are first released and in great demand, but is then left holding them when the popularity fades.

At present, said Mr Lundeen, its stores will hold 20 copies of the latest release, but after the first month will send 15 of them back to headquarters and keep just five in the shop. With a 60-second duplicator, a shop would hold blank cassettes, record a film on them when somebody wanted to rent one, and wipe them clean to be used again after their return.

'We need to strike a deal with Hollywood on the rights,' said Mr Lundeen, 'but we guess that, as long as they get paid, they don't care who does the copying.'

Hollywood may not care, but Michael Green, chairman of Carlton, and Michael Gifford, chief executive of Rank, almost certainly will.

(Photograph omitted)

News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
New Articles
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
News
The five geckos were launched into space to find out about the effects of weightlessness on the creatures’ sex lives
i100
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
ebooksAn unforgettable anthology of contemporary reportage
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering