The emergence of digital media as a viable platform for movies, television shows, and video games in transforming not only the sales environment for these products, but also the supply chain, according to results of a pulse survey of nearly 100 participants attending last month's Entertainment Supply Chain Conference Academy (ESCA) meeting in Los Angeles. Conducted by ESCA and Capgemini, the survey shows that the primary channels for growth and innovation in the industry are next generation physical DVDs (42 percent) multi-platform bundling (30 percent), and on-demand manufacturing (16 percent).
"Distributors and retailers are beginning to use technology as an enabler to provide access to content across any channel to any device," says Mark Landry, vice president in Capgemini North America's Telecom, Media & Entertainment practice. "This digital convergence will make the entertainment industry think about supply chains in entirely different ways."
Even though digital media has generated the most buzz in the industry and dominates discussion of future growth, the supply chain for the brick-and-mortar retailer continues to be the area of biggest concern for studios and distributors. Participants described returns management (33 percent) as the number one area for improvement in the home entertainment supply chain followed by retail execution (31 percent) and warehouse to delivery (18 percent). An overwhelming number of respondents conclude that the best option for supply chain improvement between the studios and retailers is generic, category-wide point-of-sale data sharing (39 percent); while others suggest returns and deduction protocol (24 percent) and scorecards (20 percent).
Other key findings from the Capgemini pulse survey at ESCA:
Participants almost equally suggest SKU proliferation/shelf space allocation (29 percent), competition between physical and digital (29 percent) and downward pressure on price points (27 percent) will have the most impact on the home entertainment supply chain.
Nearly 36 percent believe RFID at the item level is the technology that will have the greatest impact on home entertainment supply chains during the next two years, while another 25 percent say manufacturing on demand and 18 percent project digital delivery.
52 percent still believe in-store promotional corrugate is an effective use of resources.
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