Lasse Penttinen
25 Jul 2005 12:10
The Blue-ray vs. HD-DVD, once again. I don't know if everything is already said about this - twice. AMR Research has published an article which is if not fresh, but at least a good reminder back from the VHS vs. Beta age. As most of us know the better format lost the fight. The decisive blows were delivered in non-technological fields.
Source: AMR Research
DreamWorks’ recent DVD sales woes reflect the harsh supply chain dynamics of the industry. As studios ready for battle over new hardware standards, supply chain competence may make the difference.
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The Bottom Line: With super short lifecycles, the big-studio DVD title depends on the supply chain to succeed. Less obvious is that the standards battle hinges on the same thing: demand responsiveness.
Consumer demand patterns for products like video games and home movies sell up to 80% of their total volume in the first two weeks after launch. This past weekend’s Harry Potter release is a case in point (see Nigel Montgomery’s Insight Europe column titled “If Only Harry Potter Was Delivering the PSP”). This front-end loaded demand makes distribution very difficult because of the lack of historical data for demand forecasting, and the extremely short shelf life leaves little room for quantity adjustment after the fact. Add in retailers’ practice of returning unsold product to publishers, and you have the ingredients of a hyper-supply chain.