MGM Home Entertainment.(2 Distributors profiles: The majors)(Report)

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It is probably fair to say that as a studio MGM only really comes into focus once every two years when its Bond franchise is revived by the latest theatrical release. After many years of sales and distribution deals with other majors, the studio had recently emerged as a standalone outfit and had even ventured into sales and distribution itself with Icon Home Entertainment. The Sony deal, however, is likely to put an end to that.

Survey results

MGM mainly achieved scores of 2 and 3 (below average to fair), giving it an overall position of seventh (3.14). The mail order/internet sector was the most enthusiastic about the studio's general product, perhaps reflecting the greater importance to them of catalogue titles such as the James Bond franchise. The wholesalers ranked MGM second (3.56) and gave the company the top score for enjoyment of contact (4.00), marketing investment (4.00) and co-op support (4.33).

The generalists (2.84 overall) and supermarkets (2.99) were not so impressed. In particular, the generalists rated MGM lowest for overall package (2.00/below average), understanding their needs (2.33/below average) and personalised approach (2.33/below average). The specialists placed it last for marketing investment (2.80/below average) and the supermarkets judged it to be one of the worst for delivery of POS material (2.00/below average) but not for the quality or impact of such material.

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General

MGM received an overall score of 2.89/below average for its general performance, ranking it tenth out of 13. The MO/online retailers (3.17) and wholesalers (3.33) both considered the company's performance to be satisfactory, ranking it fifth, but the other three trade sectors gave it a below average rating, with the specialists considering it one of the least successful distributors in general terms along with EiV and VCI (2.87).

Most trade sectors consider MGM's general product quality to be fair with MO/online retailers giving it the highest score of 3.50 (fair to good). However, the generalists gave the studio a score of 2.33/below average, ranking it tenth (alongside Paramount and Momentum). Overall MGM achieved a score of 3.07 and was ranked eleventh.

MGM is not considered to make the most of the product available to it. The company was ranked last by the specialists (2.20) and generalists (2.67) whilst the supermarkets (2.50) and even the usually positive MO/online retailers (2.50) considered the company's titles to sometimes under-perform when compared with anticipated potential. The only dissenting voices were from the wholesalers, who believe that MGM titles perform to expectations (3.33). This was not enough, however, to raise the average score of 2.60.

Specialists, MO/online retailers, supermarkets and wholesalers consider MGM's overall package of product, sales & marketing support and supply logistics to be fair. However, the generalists consider it to be below average (2.33), although this was not sufficient to pull the studio's overall score below 3.00/fair.

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Sales

Our research highlighted mixed perceptions of MGM's overall sales performance. The generalists only gave the company a score of 2.61/below average. The other trade sectors, whilst all giving fair ratings, placed MGM in very different places in the ranking (ranging from fourth to tenth). Overall, MGM scored 3.19 and was ranked eighth. It was the only studio to feature in the bottom half of the ranking in the sales category.

Most of the trade sectors considered that MGM understands their needs fairly well. The generalists, however, disagreed, ranking the studio last with a score of 2.33/below average. Despite this MGM's average score was 3.07/fair.

MGM's ability to personalise its approach to retailers needs was rated fairly well by most trade sectors, with the supermarkets and wholesalers both awarding it 3.50 or more. However, the generalists again ranked the studio last with a below average score of 2.33, reducing its overall average to 3.13 and ninth place.

The MO/online retailers (3.50), supermarkets (3.00) and wholesalers (3.00) all considered the accuracy of MGM's sale forecasts to be fair. The former two trade sectors ranked MGM's forecasts joint second and joint third respectively. However, the specialists (2.40) and generalists (2.33) were not so enthusiastic. This pulled the average down to a rating of below average (2.73) and a ranking at number 11.

Once again MGM received a lower score from the generalists (2.33) than from the other trade sectors when it came to the studio's follow-up service (answering queries, supplying materials and completing agreed targets). The other sectors gave the company a fair rating which is reflected in the average (3.20) and MGM's ranking (seventh place).

The wholesalers appear to enjoy their contact with MGM the most, rating it enjoyable (4.00). The other sectors are satisfied with contact with the company, with none of them rating it less than 3.00, leading to an average of 3.53/fair.

All the sectors rated contact with senior management as fair (3.00-3.67) giving an overall rating of 3.47.

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Marketing

MGM achieved its best overall ranking for marketing, coming in fifth with a score of 3.35. It was placed second by the wholesalers (3.92) and achieved fair ratings from the other sectors.

The wholesalers consider that MGM's use of marketing investment is successful, giving it a rating of 4.00 and ranking it second. The other sectors rated it as fair giving the studio an overall score of 3.20/fair.

There are very mixed perceptions with regard to MGM's levels of cooperative support. The wholesalers gave the studios their top score of 4.33 (equal to Fox) whilst at the other extreme the generalists considered MGM's support to be below average at 2.67. The other three sectors all judged MGM's support to be fair, leading to an overall score of 3.27 and sixth position in the ranking.

MO/online retailers consider that MGM's packaging is good (4.00) whilst the other four sectors all rated it fair giving it an overall score of fair (3.53). Overall the company was ranked equal fifth (with the BBC and Columbia) in terms of packaging although the individual trade sectors ranked it from joint second (MO/online) to joint ninth (supermarkets).

The specialists, generalists, supermarkets and wholesalers all rated MGM's POS material as fair, leading to an overall score of 3.38.

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Logistics/supply chain

The specialists, generalists and MO/online retailers all considered MGM's logistical and supply chain performance to be fair, rating it between 3.00 and 3.17 and ranking it between seventh and tenth place. The wholesalers were more impressed, giving the studio 3.42 which ranked it second alongside Fox. However MGM received its lowest score for supply from the supermarkets which rated it (2.75). Overall the company came tenth with a score of 3.14.

All the sectors, except for the MO/online retailers (2.50), considered the delivery and condition of MGM's product to be fair. As a result MGM was ranked last but one with a score of 3.07.

Most retailers also considered that the timeliness and condition with which MGM POS material is delivered is fair, with the studio scoring between 3.00 and 3.33 from four of the five retail sectors. The supermarkets disagreed, considering it below average (2.00). Overall the company achieved a rating of 3.08, ranking it joint ninth with EiV.

MGM's handling of returns was considered to be among the best in the industry by the specialists (3.40) and wholesalers (3.67) although they rated it no more than fair. The other three trade sectors agreed with the fair judgement, but only just, each awarding MGM 3.00. Overall the studio scored 3.27/fair and was ranked sixth.

The wholesalers again gave MGM their second highest mark when it came to the studio's response to order queries, awarding it (along with both Momentum and Prism) 3.67. The MO/online sector also gave MGM a relatively high mark (3.50) which it shared with four other companies. Generalists and supermarkets rated the company fair (3.00) whilst the specialists considered MGM to be below average in its response to enquiries. Overall the company's performance was rated fair but it ranked second to last.