September 14, 2009 | Logistics
Eye on ESCA Europe: Part Four
The entertainment retailing and supply chain conference, ESCA Europe, takes place in London Sept. 23-24 with Cue Entertainment as a media partner of the event.
Bob Auger asked several of the industry executives who will be speaking at the conference to share their thoughts with Cue Supply Chain readers. In the fourth in the series, Andy Adamson, Merchandise & Supply Chain Manager, Borders UK, outlines his current concerns.
“There are two key challenges the industry has to face. First, how to preserve value in its intellectual property in a digital era and second, which of the routes to market – cinema, broadcast, rental, retail and download – it wants to support,” Adamson tells Cue Supply Chain. “Cinema and broadcast are clearly essential, but the last three have pluses and minuses.”
“We need to look at pricing and the mixed messages we are sending to consumers. The industry has been blessed with a decade or more of stupendous growth and as a result it has forgotten how to innovate and is out of touch with consumers.
“The public say they’ll buy a lot of DVDs if they are reasonably priced but unfortunately they then spend a large amount on illegal copies, or don’t pay at all for a download. The answer is not to criminalise them but to make it attractive for them to buy a legal copy.”
Borders has repositioned its offer to reflect the need to present value, Adamson says, but the market for big new titles has become largely an arena where only a few players can afford to be competitive. “I don't blame the major retailers – most of them have very few other ways of engaging the customer – however, I would ask the studios if this is really the best long term option,” he says. Adamson predicts that a model will emerge over the next few years in which major releases will be day-and-date in all formats with a pricing structure to match.
“The advantage here is that you can minimise the risk of piracy and maximise the impact of your marketing spend. This model has real advantages for the smaller titles as well,” he says. He observes that one of the important issues to consider at ESCA will be: “How many films get limited distribution in cinemas and therefore lose the impact of the reviews and marketing spend when most people have no hope of seeing them.”
The DVD industry can learn a lot from other areas of consumer goods, he says: “Customers understand the difference between hardback and paperback and you are usually catering to two different markets. The launch of Blu-ray has muddied the waters, as it came about two years too soon. The advantage of the leap from VHS to DVD was clear but, for people who have only just invested in the format, moving from DVD to Blu-ray is far less justifiable.
When due care and attention is not taken on the transfers of catalogue movies and we end up with pan & scan DVDs, this does feel like we have the cart before the horse,” Adamson says.
He believes the issue of sustainability is not simply a “green” one: “We also need to find a sustainable economic model. Taking returns back at anything between 20% and 40% on major releases is neither green nor good economic sense. Borders decided to wean itself off the drug of returns earlier in the year and I am so glad we did. We buy what we need and sell it. Our business is healthier and we are now exploring alternative routes to enable us to offer the range our customers want to see.”
The major question Adamson says he would like delegates to think about as they prepare for their visit to the conference: “What's your ‘Plan B’ if and when attempts at preserving ownership of content fail?”
Andy Adamson will be speaking on day two of the ESCA Europe 2009 event, which is organised by Futuresource Consulting at the Millennium Gloucester Hotel and Conference Centre in Kensington, London.