(From Video Business Magazine - November 16, 2000)

MetaExchange Auctions Sideways Fare Online

By Joan Villa

NOV. 16--A business-to-business auction site called MetaExchange is trying to bring "sideways selling" out of the closet and onto the Web, making the experience easier, cheaper and more efficient for independent retailers.

While MetaExchange.com has for two months offered used videos for sale, the Emeryville, Calif.-based company last week launched a new service matching sellers and buyers of new-release VHS and DVD titles, promising delivery before street date.

By using the admittedly "in your face" term "sideways selling" in the company's publicity materials, co-founder Brent Gorda said MetaExchange is trying to "get the attention of independents."

"In talking to independents, the No. 1 complaint is that program goals are set so that studios are telling them how to run their businesses," Gorda said. "What we're doing is providing a spot market so these folks don't have to hide in the closet any more and can simply buy the number of copies that are right for them and at a price that's easy to obtain."

The 2-year-old business-to-business site, like Ebay, carries a variety of products and functions, bringing sellers and buyers together by charging a commission ranging from 50 cents to 3% of the purchase price. Its recent foray into new-release VHS and DVD came at the urging of video retailers who use the site to buy and sell collectibles such as Pokemon products, Gorda said.

"We're hearing stories of retailers having to deal with brokers who charge them 100% markup. We think we can do a better job and charge them 2%," he noted.

For example, last week MetaExchange had several December VHS titles already for sale, including five units of The Cell (New Line) at $50 each, 11 copies of Gone in 60 Seconds (Buena Vista) for $45 each, 15 of Scary Movie (Buena Vista) at $52, 10 of Shaft (Paramount) for $45 and 20 of Nutty Professor II: The Klumps (Universal) at $14.99.

If a buyer makes an offer before street date and a price is accepted, the copies shipped will be new product, Gorda said. However, if a price is reached after street date, then units may be previously viewed. MetaExchange urges all buyers to observe studio street dates, he added.

Buyers pay shipping costs and specify their preferred methods of payment and delivery, while sellers must pay the MetaExchange commission. The site requires registration to conduct a purchase or sale, and so far, about 40,000 people are registered, according to Gorda.

The company is pitching the service as a "streamlined" way for retailers to achieve "pricing parity" and eliminate goals, product returns and markups.

"Sideways selling is commonplace among retailers today and our system simply leverages the Internet to bring thousands of retailers together to make the process more efficient and economical," said senior VP Bob Reid. "The absence of broker markups and studio goals can result in significant savings for retailers who don't participate in studio copy-depth programs."