The main reason that GoodTimes Home Video, now in its seventh year of operation and boasting a 30% revenue increase over last year, has continued to grow, according to senior VP Jeff Baker, is the company's all-inclusive, or "vertical," approach to business.

"A typical video supplier," he explains, "relies on third parties for things like packaging, duplication and warehousing. We do practically everything ourselves. We are a completely vertical company, and totally dedicated to that concept."

In addition to doing all of its own duplication (the company has 7,500 slave VCRs working three shifts a day, with a total annual capacity of 60 million units), GoodTimes has practically eliminated the middleman in terms of distribution.

"Typically, the video supplier moves 75% to 80% of its product through two-step distribution channels," Baker points out. "We are 95% direct to our customers." GoodTimes operates a 130,000-square-foot distribution center in New Jersey, from which it ships its products nationwide. Most of GoodTimes' product is duplicated in the more cost-efficient four-hour LP mode, which Baker says offers "more than acceptable" levels of audio and video quality for consumers.

Because the majority of GoodTimes releases are positioned for mass-merchandiser sell-through programs (typically priced at below-$15 and below-$10 points), the company deals primarily with large retail chains, such as mass merchants, supermarkets and drugstores. Only about 5% of GoodTimes' retailer customers are specialty dealers, Baker notes.

Besides providing product, GoodTimes is obliged to help its larger accounts merchandise as well.

"We work as a partner with the retailers we sell to," says Baker. "We operate a large number of permanent fixtures in retail stores. We're basically a rackjobber." Among the supplier's key accounts are Wal-Mart, Toys "R" Us, and Phar-Mor.

Baker admits that, although tremendous numbers of tapes are sold through the high-volume accounts, a large number of tapes are returned.

"We put fresh product out on a regular basis," he says. "We release approximately 200 titles a year. We're feeding a shark, and sure, part of [our] business is taking product back."

One recent program that demonstrates GoodTimes' desire to branch out in the video marketplace is the introduction of a rental-priced line. The first rental release from the company was February's Naked Lie, which Baker says performed well through the company's exclusive distribution arrangement with Ingram. The next release will be Evil in Clear River (street date: June 24), a thriller starring Lindsay Wagner and Randy Quaid. Two more rental-priced releases will follow in the fall.

GoodTimes' product line is extremely diverse, comprising hundreds of mainstream movies (mostly sourced through its deal with Columbia TriStar), exercise video (including the top-selling Cosmopolitan series), kidvid (featuring such series as The Babysitters Club and animated features like Beauty and the Beast), and television product (such as Little House on the Prairie and selected episodes of the original The Addams Family). The company is always on the lookout for new series with sell-through potential, Baker adds, noting the upcoming touchpoints parenting videos, hosted and created by Dr. T. Berry Brazelton, whom baker describes as "the new Dr. Spock." The first touchpoints tapes are due this fall.

"The one thing all our products have in common," says Baker, "is their salability at the under-$15, under-$10 range.

"We have had an under-$10 strategy with our Cosmopolitan exercise series that has resulted in our selling millions of units while other companies market the higher-priced Jane Fonda and others. We realized that the women who exercise to these tapes want to keep updating their programming. Exercise is the ideal for this price point because it's a replacement-type of market."