Retail Giant Tesco Gets Into The Movie Business

from the alternative-means dept

Fri, Jan 29th 2010 4:40pm — Mike Masnick

Even as the movie business has had yet another record breaking year at the box office, we still hear claims from Hollywood that online downloading of unauthorized movies is going to kill the movie business. And yet, where there's demand, new business models will be created. ethorad points us to the news that UK retail giant Tesco is getting into the business of producing movies itself based on the books of some very famous authors. The movies will be direct-to-DVD and direct-to-the-internet, but the idea is for Tesco to use these movies to generate more traffic to their stores (both online and off). In fact, if you look at the retail business, music and movies have long been used as a loss leader of sorts, to drive traffic to get them to buy other, much higher margin, goods. This is really an extension of that, but all the way to the point of helping to fund the production of the movie itself. Also, while it will have a window of exclusivity at the beginning, it sounds like Tesco is quite open to other stores selling the movie as well. Either way, it's interesting to see other third parties recognize that they benefit from having movies made, and thus are willing to partially fund the production of those movies.

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Filed Under: funding, loss leader, marketing, movies, promotion
Companies: tesco

14 Comments

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Anonymous Coward, 29 Jan 2010 @ 5:39pm

I look forward to watching Tesco Value Harry Potter.
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Anonymous Coward, 29 Jan 2010 @ 8:07pm

Re:
And the resulting lawsuit. :P
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Richard (profile), 30 Jan 2010 @ 2:47am

Hollywood is stuffed
Hollywood is stuffed. Tesco are a very smart,competitive and sure footed outfit - and big enough to pull this off.
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Call me Al (profile), 30 Jan 2010 @ 2:48am

Tesco are an odd bunch, they are actually quite disruptive compared to other UK supermarkets and I think overall they've made that market better. They like to try new things and have the cash to back it up.
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Richard (profile), 30 Jan 2010 @ 7:59am

Re: Uk supermarkets
The UK supermarket business is very competitive and Tesco are a key component in that mix. They have some tough competition to deal with (at present mainly Morrisons I think the Asda (Walmart) challenge has foundered and they saw off Sainsbury a while back) and can't afford to stand still.

They also have a history of disliking artificial monopolies and trying to manouevre around them (not always with ultimate success admittedly). This looks like another go at the same idea.
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The Anti-Mike (profile), 30 Jan 2010 @ 12:38pm

I am just thinking how little I like no-name brand products from a supermarket, as they are usually the cheapest and lowest possible quality. I just can't wait to see the quality / cost trade offs they end up making on the movie product.
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Richard (profile), 30 Jan 2010 @ 1:28pm

Re:
"I am just thinking how little I like no-name brand products from a supermarket, as they are usually the cheapest and lowest possible quality. I just can't wait to see the quality / cost trade offs they end up making on the movie product."

You may not like them - but lots of people buy them so they can't be really bad. They are very profitable or the supermarket wouldn't bother with them.

Not liking them probably says more about you than about the products.
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Chargone (profile), 30 Jan 2010 @ 3:33pm

Re: Re:
i dunno... i figure a lot of them sell on the basis of being 'good enough' and cheap enough that people can actually afford to have them...

so, yeah, they can't be terrible, but they can easily be 'not great'.

which, admittedly, when it comes to movies, seems like it would be a step up half the time...

and the difference between 'great! too bad i can't afford it' and 'well, it's ok... hey, i can actually afford this!' for the same (general) product is a big one...

also: i am protesting against the existence of capital letters today. they have aggravated me one too many times :)
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Mr RC (profile), 31 Jan 2010 @ 11:32pm

Re:
Actually, quite often the no-name brands are simply repackaged name brands.. easier to get both sides of the market.. the snobby 'oh I don't buy no-name brands' and the poor 'can't afford the good stuff, but this is alright' .. do you really think supermarkets have factories and such to produce such a varied selection of goods? ..

Nope.. 'Tesco brand' or '[Name your supermarket] brand' are brand name foods.. just rebranded..
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ethorad (profile), 1 Feb 2010 @ 3:43am

Re: Re:
I read something on this, think it was in freakonomics - apparently for a lot of people the existence of a cheaper brand that they don't want makes them think the nicer brand is better and worth more. Basically if there's only one type of tin of beans you might pay 50p, but if there's a horrible looking cheap one for 30p you might pay 60p for one that's not nasty. Apparently that's why the "own brand" packaging looks so bad - after all it wouldn't cost much to make the packaging nicer. Plus they can now sell to the people who can only (or will only) pay 30p for beans.
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ethorad (profile), 1 Feb 2010 @ 4:45am

Re: Re: Uk supermarkets
Yeah, the number of pies that Tesco has managed to stick their fingers into is pretty impressive - finance, mobile phones, internet access, insurance ...
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Michael, 1 Feb 2010 @ 6:17am

Re: Re: Re:
With the movie budgets going completely crazy these days, it will be interesting to see a retail company like this taking the wheel on a movie. It is unlikely that they will be making $200 billion block-busters, but they may also be able to get above the typical low-budget mark as well. Having a budget-minded company try their hand at this may be really good for the overall movie industry by forcing others to reduce costs to compete.
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PaulT (profile), 1 Feb 2010 @ 7:53am

Re: Re: Re:
Yeah, it's true. I used to have an old school friend who worked in a biscuit factory when he left school. According to him, the name brand and supermarket own brand chocolate digestives were identical, they just changed the packaging and charged 60% higher prices.

Yeah, some things might cost more and be of actual lower quality in the supermarket. But if you depend on brand name alone to tell you quality, you're a fool and you're being robbed every time you shop.

As for this idea, it's a little strange but might be workable. British movie productions are usually very low budget compared to Hollywood fare, so they should be OK if they have someone capable of picking talent. Maybe not the next Harry Potter, but the lineup mentioned is starting with a Jackie Collins adaptation so that's hardly the market they'll be going for anyway. Although, ironically, the company seems to have been set up by ex-New Line staff, presumably after the disastrous reception of The Golden Compass put the last nail into that coffin.

Get a reasonable quality movie on the shelves for a reasonable price, let everyone know that you can't buy it anywhere except Tesco and people will buy it. I'd not watch the Collins myself, but I'm personally interested as to what the Philip Pullman and Karin Slaughter adaptations would be...
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Anonymous Coward, 1 Feb 2010 @ 8:41am

Re:
Who cares.... you get a free trial packet of washing powder with every movie and a coupon for 15p off Chocolate Digestives!

And we all know that you don't have to waste millions and millions to make a good movie (Paranormal Activity etc.).

Also, I bet you that Tesco "get it" more than Hollywood does.

Running scared?
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