Tom Moran, Senior Director of Media and Entertainment Markets for Savvis, offered insights into the development of supply chains for digital goods at the recent Entertainment Supply Chain Conference in London. Here are several key takeaways:
Opportunities: While he music business may have broken ground for digital entertainment, Moran points to the current online gaming market as an example of how content owners can move their peak sales to as many as nine months past their products’ street date, “just by changing their pricing policies” and adding new downloadable content. With BD Live on Blu-ray, movie studios may have a similar opportunity to change how (and when) revenue is generated off a given title.
Challenges: Digital has not yet lived up to its potential for greater precision in sales reporting and tracking, Moran says, and consequently, content owners have been unable to reliably measure the impact that digital models are having on legacy markets. For service providers, reporting and auditing could spell opportunity. “Information that gives your customers insight as to how their products are being used and consumed is going to be very valuable — and it’s going to be an expectation that almost everybody is going to be coming to the table with for the foreseeable future.”
Timing: To date “walled garden” models such as Apple’s iTunes and Microsoft’s Xbox Live Marketplace have prevailed. Ultimately, consumers will want the walls torn down, but not at the sacrifice of convenience.
For packaged goods vendors, Moran muses that the timing is “very good” for developing digital supply chain services. “This market still has a long way to go in terms of where we’re going to end up with solid models.”