Why, do you think, online stores have become such an important retail outlet for DVD immediately after the format’s introduction?
There was a commonality of demographics between Internet users and early adopters of new consumer electronics technology. Most of our early customers naturally sought out product on the Internet after failing to find a large selection of titles in a conventional retail environment. We also spent a good deal of time educating our customers about the technology and the features on specific movies.

We have seen some serious price wars between DVD online retailers in the past months. Loss leaders are used to literally leave the competition in the dust. What are the incentives behind these aggressive strategies and do they actually pay off?
In any retail environment, price competition is always good for the consumer. We survey the competition and aggressively price our product and shipping costs to be at the low end of the range. At the moment, we don't have a choice but price this aggressively. Over the long run, prices will rise a bit. A business can't consistently sell below cost and expect to have a viable business model.

At what rate - compared to new releases - do people actually order backcatalog titles? Are back catalog titles dead or do they sell at a steady rate?
Catalog sells extremely well on DVD. We don't have any statistics on this, but I believe it's over 50% at this stage. There are a lot of folks replacing laser and tape collections.

Do you have any plans to make DVD Express a brick-and-mortar store someday?
No we don't. I think that the Internet is our future.

Many people complain the lack of non-region-coded discs from outside the US in DVD Express' catalog. Are there plans to incorporate and directly import titles from, say, Hong Kong in the future?
Possibly. However, we really haven't had too much demand for such items.

DVD Express is planning to go public later this year. What exactly do you expect from this move?
We expect to use the funds to fuel our growth over the next couple of years. Commerce on the Internet is just beginning; we want to be one of the name brands to emerge over the near term. We're off to a good start, we just need to turn up the volume.

What do you think is the key to success in online retailing? Treating every customer as though he/she is your only one. We don't take our customers for granted. We try to make the application of our technology simple and compelling so that our customers feel like we've simplified their lives and given them time to do more important things.

Where do you see DVD Express two years from now?
We see ourselves as becoming a shopping agent, not a store. Conventional stores and shopping require a lot of work on the part of the consumer. We want to take the time consuming and confusing part and transfer it to our technology and staff, leaving the enjoyable part to our customers. This means making informed choices from a large inventory, and getting product quickly and at a low discount price.

What do you feel is DVDs biggest problem these days to establish itself as a mass medium for home video entertainment?
Everything's been well conceived, planned and orchestrated. There's nothing lacking with DVD that time won't fix. Remember that Rome wasn't built in two years!

 By Guido Henkel

March 29, 1999