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The 'Long Tail' Meets Retail at ESCA 2007
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May 7, 2007, 13:53

Sonic Solutions will present the latest updates about their Manufacturing on Demand (MOD) technologies for retailers as part of the Digital Supply Chain Conference at ESCA 2007 in June.  A presentation by DVD pioneer Jim Taylor, General Manager, Advanced Technology Group, Sonic Solutions, will explain how a new generation of in-store kiosks and recordable media will soon be providing retailers with an opportunity to provide extensive catalog offerings to customers, which otherwise would not be available due to shelf-space limitations. 

Similar to the digital photo finishing business, which has successfully turned do-it-yourself printers into in-store destinations, these DVD burning kiosks may have a significant impact on the future of physical media as well as the overall entertainment media supply chain. 

"The advantage to the retailer is that this isn't going to replace the traditional packaged goods channel for hit movies but it can still be used to replenish inventory when the shelves go dry. It solves the common problems of out of stocks and lack of shelf space, which in some cases cause 30 percent of consumers to go away empty handed. It will also help drive store traffic and keep customers in the stores for longer periods of time. Catalog content or niche markets such as children's or special interest genres can also be delivered with this type of automated, digital distribution system," Taylor explains.  

"In January Sonic publicly announced Qflix, a technology and IP licensing program to enable secure DVD-on-Demand solutions in the home as well as retail through DVD Kiosks. One of the early retail supporters of Sonic's program referenced in the release was drugstore chain Walgreens."
 
Taylor adds that the technology, which has already been licensed to several DVD kiosk manufacturers, is expected to be introduced as a retrofit to existing in-store devices, as well as in new free-standing kiosks that are connected to the studio's digital supply chain via high-speed Internet connections.  All content is stored on site in a system hard drive, which is protected from hacking with a technology similar to a cash machine ATM.    

"The lack of shrinkage is key advantage.  A store can have 50,000 titles on site that can't be pilfered off the shelf. Part of what we are doing with this software infrastructure is offering high-level encryption, so that even if the hard drives are stolen the content can't be hacked into." 

In some retail environments, Taylor relates, LCD screens will be distributed throughout the store so that customers can browse available content wherever they like and order the disc from any aisle, before receiving the final product at the cash register on their way out the door.  Some stores will be providing personal branding and retail offers on the ink-jetted packaging. 

In-store DVD burning will pre-date at-home versions for digital download services like Movielink, which is expected to debut next fall.  In addition to the need for new blank media, at home users will first require a new generation of disc drives in order to download and burn, copy-protected versions of home videos. Next year you will begin to see CE devices, networked cable products and set top boxes all outfitted with the Qflix licensed logo. 

For the time-being, though, DVD burning kiosks address the supply chain needs of numerous outlets that need to provide the consumer attraction of home video offerings, without giving up valuable shelf-space, combining the benefits of digital delivery while satisfying the consumer preference of owning and collecting physical media. 

Taylor concludes: "Discs are not going to go away.  The kiosk solution requires no inventory, involves no returns, experiences no shrinkage and it opens up  a new channel of distribution for the studios while it helps consumers satisfy their growing demand for 'long tail' catalog content."


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