Movies Unlimited: Focus on Niche Cataloging

Set in a small industrial park in Northeast Philadelphia, Movies Unlimited is a movie collector’s nirvana.

Inside its compact, 22,000-square-foot warehouse, rows upon rows of shelves house neatly stacked DVDs and VHS tapes in alphabetical order. Here, “Abandoned,” a 2001 Academy Award nominee for Best Foreign Film, shares space with comedy classics such as Abbott & Costello.

This niche cataloger, which specializes in hard-to-find movies dating back to the silent screen, enjoys steady annual sales growth. The company’s 12-month housefile grew a whopping 65 percent between August 2000 and May 2002.

The company’s growth is remarkable considering discount stores and clubs dominate the home video universe. Its competitive advantage, however, is not only its breadth of merchandise — 70,000 titles — but its unique selling proposition (USP): hard-to-find movies from the golden era of Hollywood sold at a competitive price.

Movies Unlimited gives its customers a reason to shop by mail rather than retail. That USP, coupled with solid catalog basics — from creative to back end fulfillment — keeps the merchant pulling solid growth figures in what for many is a challenging catalog market.

The Golden Age of Hollywood

Movies Unlimited’s marketing strategy centers on its ability to tap into a movie lover’s sense of nostalgia.

To provide a better perspective on how his business works, President and Founder Jerry Frebowitz shares an example: In the 1990s, Hollywood announced that the blockbuster hit “Jurassic Park” was going to be released on video. Along with its retail and mail-order competitors, Movies Unlimited took pre-orders, and “Jurassic Park” proved a tremendous seller.

At the same time Universal Studios released the dinosaur mega-hit, it also released six Ma and Pa Kettle titles — a popular 1940s film series chronicling the adventures of a hillbilly husband and wife and their clan of 15 unruly children. Frebowitz says the Kettle series was “a rare and obscure choice for Universal to make, but we’d been begging them for that kind of stuff,” and so Universal took a chance.

“We’ve sold more of the Ma and Pa Kettle titles than we’ve ever sold of ‘Jurassic Park I, II and III’ combined. That’s the kind of market we have,” he says.

Frebowitz goes on to explain that while other merchants claim popular releases such as “Titanic” or “Moulin Rouge” as their top sellers, Movies Unlimited’s top seller wouldn’t fall into that category. Instead, it might be “God is my Co-Pilot” or “It’s a Wonderful Life.”

Oscar-winning classics such as “Gone With the Wind” and “Citizen Kane” also rank among its bestsellers, and while the company has offered “Casablanca” for close to 20 years, it continues to sell thousands of copies a year.

Its customer profile reflects this differentiation between typical video buyers and Movies Unlimited’s buyers. Says Frebowitz: “I always was told that [home videos] were a man’s market — that the customer was a man between the ages 25 to 34. I find that’s not true. We get a tremendous amount of business from women and also from customers older than 34.”

Indeed, a glance at the cataloger’s list data card reveals 33 percent of the 193,267 12-month buyers on its housefile are women, and the average age of buyers is 43.

As General Manager Ed Weiss, notes, “Our customer is older because our claim to fame is not just offering all the movies out there, but specializing in movies from the 1930s, 1940s and 1950s, which would obviously attract an older audience.”

A Solid Foundation

The bedrock of the business is its 816-page catalog, a veritable encyclopedia of movies currently available on video and DVD. The annual publication is designed and organized with movie collectors in mind. For example, comedies from the 1940s are grouped together, as are “B” westerns, vintage TV shows, cult classics and more.

A creative staff of 12 is responsible for writing and designing pages for its master catalog, as well as for smaller supplements mailed throughout the year. Writers compose short but detailed synopses for each product, which are categorized by subject, genre and decade; cross-referenced by title, actor and director; and entered into a propriety database system. For example, the 1992 release of “The Last of the Mohicans” would be listed under both Daniel Day-Lewis and James Fenimore Cooper.

This information is extracted and downloaded into catalog template pages created using a version of Ventura layout software. The pages then are designed by graphic artists who use photos and blocks of color on the otherwise black-and-white pages to showcase legendary films and actors.

Because of its heft and size, the Movies Unlimited Video Catalog is mailed at no charge only to the top 15 percent of the company’s customers, determined based on the RFM (recency, frequency and monetary value) of purchases. However, the catalog is made available to the remainder of its customer base, as well as requesters, for $9.95 plus a $3 shipping and handling charge. To offset the price of the catalog, customers get discount coupons worth $10 with each catalog order.

A Compelling USP

Movies Unlimited procures most of its merchandise from film studios, which notify the cataloger of new releases and discontinuations with advance mailings. Its product mix changes daily, with an average yearly turnover of 20 percent, although Weiss admits this percentage is getting higher as the home-video industry transitions from the VHS format to DVD.

Because product descriptions organized by category already reside within the database’s structure, the cataloger easily can create several sideline catalogs to supplement its master book, as well as special promotions and prospecting efforts. Its Videoflash catalog, for example, is a 144-page, 8˝ x 10˝ quarterly supplement mailed to its entire housefile that features new releases, discontinuations and price reductions, and highlights bestsellers.

Throughout the year it also mails specialty catalogs that highlight specific promotions. These digest-sized catalogs also are mailed to segments of its housefile based on recency or a combination of recency and dollar volume.

Its prospecting vehicle is its 160-page, 8˝ x 10˝ Movies for Movie Lovers catalog mailed throughout the year to rented lists. Last year, it pulled a yearly response rate of 2.6 percent, excluding orders driven from the print catalog to the Web, which are not tracked.

While the merchant includes new mainstream releases in its sideline catalogs, it recognizes the selling power of screen gems from the 1930s, ‘40s, ‘50s and ‘60s. So while it would list new releases such as “I Am Sam” and “Blue Moon,” it would devote more space to a movie such as “The Incredible Mr. Limpet,” (a 1964 comedy starring Don Knotts), says Frebowitz, because “we know that customer is our customer.”

All told, Movies Unlimited mails approximately 2 million to 2.5 million catalogs annually.

Online Upselling

Web orders account for 30 percent of Movies Unlimited’s current business. The same proprietary database used to create the print catalogs also drives the company’s Web site, www.moviesunlimited.com. The database structure enables customers to directly order their favorite movies online by entering item numbers from the print catalog.

Customers who prefer a more leisurely online browse through the catalog’s extensive collection of movies can search by category, genre, decade, actor, title and director. The site mimics the experience of flipping through the pages of its master catalog — text-heavy, graphically light — and each movie is listed in the same order as it appears in the catalog.

Moreover, organizing products by category gives Movies Unlimited a chance to upsell. This strategy — also used in its print catalog — is well-executed when you consider the average price-point range of its offerings is $14.99 to $19.99, and its average unit of sale is $80.

If Web visitors search for “Ma and Pa Kettle at Home,” for example, they would see on that same page this line of text: “Also available in our 800-page catalog … .” What appears next are the 10 entries in the print catalog that follow the search result.

“There’s no artificial intelligence; there’s real intelligence that goes into this,” Weiss explains.

Of course, if someone happens to choose the second Ma and Pa Kettle listing, says Frebowitz, he or she may see only five Ma and Pa Kettle titles and five titles that aren’t necessarily related to Ma and Pa Kettle, but appear before it in the book. However, Weiss notes, “They would be comedies from that era. So, it would still be something of interest.

“That’s how we get multiple sales and what our business is built on: Dealing with collectors who want to buy more than one movie and want to buy often,” Weiss continues. To this end, each listing is written to bring attention to another movie a customer may like. “They’re all connected,” says Weiss. “We look for every little hook that would fit one movie with another.”

An Integrated Business

At Movies Unlimited, all catalog functions are performed in-house by a staff of 85 at its headquarters in Philadelphia, with the exception of overflow and after-hours order calls that are outsourced.

The same proprietary computer system used to organize its catalog layouts and Web-site updates also is responsible for order processing, inventory, customer management and accounting.

Once a transaction is entered into the system — either by one of its 14 in-house customer service reps or via the Web — the system generates a pick list of 500 to 1,000 orders. Staff then go through the inventory shelves housed within its warehouse and batch pick orders by title. This smaller group of items then is transferred to an adjacent station where the merchandise is matched to individual orders.

From here, orders travel along a conveyor belt from which employees take, box and redeposit orders for transport to a final station where postage is applied. The cataloger uses the ClipperShip shipping solution that rate shops for the best delivery method. Most orders, however, are sent as media mail via the U.S. Postal Service or parcel post by UPS.

Interestingly, the first quarter usually is Movies Unlimited’s busiest time of the year. “The first quarter is as good as or better than the fourth quarter because we pick up a lot of brand-new customers around the holidays,” says Weiss.

He explains that gift buyers often place orders from the catalog included with the gift order, and gift recipients often are completing collections. In addition, The Movies Unlimited Video Catalog is published at the end of the year, which also contributes to first quarter sales.

A Winning Strategy: Keep it Simple

Aside from the pure genius of Frebowitz in seizing a lucrative business opportunity ahead of its time (see below: “How a Hobby Became a Business”), much of the cataloger’s success can be attributed to its adherence to the old rule: Keep it simple.

At a time when many mail-order businesses are laying off employees, filing for bankruptcy and selling off credit-card divisions, Movies Unlimited is debt-free and growing its sales and housefile. It can afford to buy surplus inventory of movies that soon will be discontinued. And Weiss says the company doesn’t liquidate its stock and isn’t afraid to hold onto surplus inventory for a few years. “I know we’ll eventually sell it,” he says.

While this cataloger may not be considered a highly innovative business from a technology standpoint, it is solidly managed. “We don’t try to be the biggest company around,” explains Weiss. “We run the business like a small, family-owned business, and will do so as long as we can. One of our keys to success is having good people around us. We’re very lucky with our employees. Many of them have been with us for more than 10 years.”

What’s more, with the exception of its customer sales reps, all employees are cross-trained to do more than one job, helping the company to keep its payroll costs down while providing good customer service.

In short, Frebowitz and Weiss stay focused on serving their customers expertly and efficiently.

At a Glance:
Movies Unlimited Catalog Buyers: 193,367 12-month buyers
Average income: $70,000
Average age: 43
Gender: 58 percent male; 33 percent female
List manager: Direct Media, (203) 532-1000.

About Movies Unlimited:
Headquarters: Philadelphia
Founded: 1978
Products: Films on VHS and DVD
Specialty: Hard-to-find movies
Number of employees: 85
Price-point range: $14.99-$19.99
Ranking on the Catalog Success Top 200 list of catalogers (as measured by housefile growth): No. 35
Annual mail volume: 2 million to 2.5 million catalogs
Average unit of sale: $80

How a Hobby Became a Business

Currently celebrating its 25th anniversary, Movies Unlimited is a business that has been and remains ahead of its time, and as such, has gained valuable market share.

Not only did its founder, Jerry Frebowitz, realize a business opportunity in selling movies by mail order before the birth of the home video industry, he also recognized the allure of movie classics. Indeed, the growing popularity of DVDs among older viewers has only recently encouraged many studios to go back into their vaults and re-release classic films.

The genesis of Movies Unlimited started out as a small, mail-order business called Brenda’s Movie House. As Frebowitz explains it, his wife wanted to start a little business of her own, but didn’t know what to sell. Frebowitz, an avid movie collector, suggested films. Operating from the basement of their home in Philadelphia, she began selling Super-8 movie features by mail in 1975.

Before long, Brenda had gathered a number of customers and an offering of 100 films. Her husband, Jerry, then decided to divide his time between the fledgling mail-order business and his costume jewelry retail shop.

In 1978, Jerry Frebowitz began devoting his full attention to the growing mail-order business and moved its base of operation to a small retail location in Northeast Philadelphia, a predominantly blue-collar quarter of the city. “We were mostly a mail-order operation with a door in case someone wanted to come in and buy,” remembers Frebowitz.

Soon after, the VCR was introduced and Frebowitz’s business mushroomed. At the suggestion of his son, Brenda’s Movie House was renamed Movies Unlimited.