CE Supply Chain News

Defining the European Home Entertainment Supply Chain

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Distribution in Europe is fragmented since it involves a group of individual countries rather than one nation, each with its own retail landscape. Although there are retailers that do operate in more than one territory there are no dominant Pan-European retailers that are the equivalent of Wal–Mart in the United States; even the Metro Group with its expanding MediaMarkt/Saturn stores are only present in a handful of territories. Instead, each territory has its own dominant retailers with their own ordering/goods in procedures (i.e. direct to store/via DC/via wholesaler and different IT capability and willingness or ability to adopt VMI). This makes for servicing the market a complex and costly challenge.

Similarly, there issues arise as a result of individual national sell-through windo,s which impact the supply chain. For example. the sell-through window is longer in France than in neighbouring Belgium, which means that a separate French SKU is often required and that there are ongoing concerns over grey importing into France of titles that are released earlier in Belgium.

In addition, there is the need for different language SKUs not only in terms of the content on the disc but also in terms of the printed material on the packaging.

Currently, no single distribution group offers complete Pan-European coverage as they are able to do in the USA. Some European distribution operations are a blend of wholly owned and managed facilities, and a number of alliances and outsource agreements between replicator/distributors and freight forwarders have been forged. This does not always make for a seamless operation! Many content owners still opt for the best solution for a specific territory, which offers opportunities for localised distributors.

With the home entertainment market now in a mature phase, and growth from high definition formats and new media not yet being realised, maximising efficiencies in the DVD video supply chain are becoming of significant strategic importance to the industry.

PROGRAM NOTE: A detailed presentation of this exclusive report will be presented on the morning of September 18, 2007 at the Entertainment Supply Chain Europe Academy in Madrid. Entitled, “Home Video Industry: A Market Perspective,” the session will review how the changing dynamics in the European home video industry are impacting on the studio supply chain. Going forward, how will home video divisions and their distribution partners adapt to meet the changing consumer and demand for physical and digital entertainment media?

For more information about the event visit: www.entertainmentsupplychain.com

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