Digital supply chain promise

The emergence of digital media as a viable platform for movies, television shows, and video games holds the greatest promise for future sales growth in the entertainment industry according to the results of a pulse survey of nearly 100 participants attending the Entertainment Supply Chain Conference Academy (ESCA) conference in Los Angeles this week.

According to the survey conducted by ESCA and Capgemini, the primary channels for growth and innovation in the industry are next generation physical DVDs (42%), multi-platform bundling (30%), and on-demand manufacturing (16%).

“This survey shows the home entertainment supply chain is evolving to deliver DVDs and Internet based programming in a seamless fashion to consumers,” says Mark Landry, Vice President of Capgemini North American Telecom, Media & Entertainment practice.

“Distributors and retailers are beginning to use technology as an enabler to provide access to content across any channel to any device. This digital convergence will make the entertainment industry think about supply chains in entirely different ways.”

Despite the buzz generated by digital media, the biggest area of concern for studios and distributors continues to centre on supply chain issues affecting their brick-and-mortar retail customers.

Survey participants described returns management (33%) as the number one area for improvement in the home entertainment supply chain followed by retail execution (31%) and warehouse to delivery (18%).

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%); while others suggest returns and deduction protocol (24%) and scorecards (20%).

“While digital media is not new, the impact of this delivery system on the supply chain is new and significant,” adds ESCA Conference Chair Devendra Mishra.

“This survey shows the entertainment industry must simultaneously enhance the present customer experience in store while preparing for the future when consumers procure, store, and watch entertainment digitally. This is a true inflection point for the industry between the physical and the virtual.”

Other key findings from the Capgemini pulse survey at ESCA:

· Participants almost equally suggest SKU proliferation/shelf space allocation (29%), competition between physical and digital (29%) and downward pressure on price points (27%) will have the most impact on the home entertainment supply chain.

· Nearly 36% 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% say manufacturing on demand and 18% project digital delivery.

· 52% still believe in-store promotional corrugate is an effective use of resources.

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