D&H: Digital Video Is Hot Ticket

The Harrisburg, Pa.-based distributor expects sales from specialty video products, which include video capture cards, editing software and output devices such as DVD-RW drives, to increase 20 percent this year over last year.

D&H recently signed on to distribute products from Avid Technology, including the vendor's Xpress DV video editing software. The distributor also carries products from ATI Technologies, Canopus, Dazzle, Hauppauge Computer Works and Pinnacle Systems.

D&H informally classifies solutions into three categories,consumer, "prosumer" and professional, said Michael Schwab, vice president of purchasing at the company. The prosumer area,somewhere between consumer and professional,is where solution providers can find the most opportunities, especially in vertical markets, he said.

"Resellers are always looking for ways to go back and sell to the current user space," Schwab said. "Today, if resellers look at their customer bases, I think they'll have opportunity at some level."

A video editing solution that cost $25,000 three years ago and now sells for about $3,000 still provides ample margin opportunity for solution providers, especially in the professional space because manufacturers require partners to be authorized to sell their products, he said.

"[The vendors] are very committed to maintaining margin opportunity for resellers, and I don't see that business model changing in the foreseeable future," Schwab said. "They want a higher level of service from resellers so they will maintain margin structure for those guys."

Meanwhile, the decreased pricing of video editing solutions has opened the door for organizations that couldn't afford those systems as recently as a couple of years ago, said Mike Sokolowski, computer and video specialist at Safe Harbor Computers, a solution provider based in Waukesha, Wis.

"We even sell [video solutions] to churches to tape community events or food drives and then broadcast them on a local religion channel or on a projector at the church," Sokolowski said.

Safe Harbor has provided video solutions to education and event videographer customers since the 1990s, when those systems ran on Commodore Amigas.

"Now, for only a few thousand dollars, you get into video editing," Sokolowski said. "If customers get the lower-end systems, you may make less money, but those customers usually need training."