3D movies will probably save the movie industry from piracy…where is the new widget that will save the music industry?

June 22, 2009

coralineThe other day, I went to see “Coraline”. The manually animated movie brought to us in 3D.

Coraline is a combination of (very) old techniques -manual animation-, state of the art  technology -Polyjet matrix molding- and recentish technology -Real3D- (which is in fact close to 30 years old).

Nothing groundbreaking here…!?

Be not mistaken: apart from it being a thoroughly brilliant piece of entertainment, with a picture quality and viewing comfort that is somehow superior to standard 2D movies, 3D film is the movie industry’s answer to piracy.

Well of course…what is the point of stealing a film off the screen by filming it with a video-camera if all you will be able to see when you view it from your DVD player, is a blurred picture.

Here is an industry that is staying ahead of pirates by bringing a more exciting experience to its audience. And the best of it all is that not only have they reduced piracy but they have increased their profit margin by renting the 3D glasses (50% increase in price!).

On the other hand, the music industry is clinging to restrictions, regulations and threatening people with jail if they download music (they are trying to do this in France but the representatives aren’t having it for the moment), rather than enhancing the customer experience.

So what will be the 3D of music? I don’t have an answer today but someone should be thinking hard about what new experience music could bring people rather than trying to restrict the access.

You cannot force people to buy something if they can get it for free. You can convince people to pay for something new and exciting.

Ready, steady,…go channel! Part 3

July 1, 2008

Part 3: How will you roll-out your plan?

Working through a channel doesn’t mean you can just relax and wait for it all to happen. On the contrary, your initial efforts will need to be significant if you want your channel sales to take off.

Build the right team to work with your channel 

  1. Consider recruiting an experienced channel manager rather than promoting one of your direct sales people
  2. If you can afford it, create a channel marketing position
  3. You can adjust your order management team
  4. Channel partners are good at using on-line tools. Are yours ready?

Is your finance organization ready for a different business model?

  1. You will be collecting larger amounts with different payment terms and different payment “habits”. Resellers are often strapped for cash…
  2. You will be paying out money or making credits in the form of Co-op advertising support or Market Development Funds. This doesn’t happen in a direct model
  3. You might need to pay finder fees to people you aren’t actually trading with such as Influencers (this concept is one of the most difficult for financial departments to cope with)

Can your marketing policy and organisation handle the requirements of your channel strategy?

  1. You probably need to re-balance your marketing budget
  2. Your partners will expect support through co-operative and market development funds (Co-op and MDF in channel lingo)
  3. At some point, you will need to build your brand and product awareness in the channel, should you plan a Marcom budget for this?
  4. How will you help your channel promote your products on their web sites?

If you actually ship stuff:

  1. Check your packaging (cartons, cases, pallets, containers, etc…)
  2. Check your part–numbers (UPC codes are sufficient)
  3. Does your price list provide for volume orders?
  4. Are your logistics ready for a change of pace?
  5. Do need the logistics you had up to now?

If you sell software:

 Can your systems report by whom the revenue was generated

If you provide services

Can your channel partners resell them (do they have a part number)?

Backdoor visits: how easy are you to do business with?

May 29, 2007

whouse.jpg Whenever I visit a distributor, I always make sure I pay a visit to the warehouse manager and invite him to show me anything he believes we could improve. If possible, I would ask one of our logistics managers to come with me, provided they can share the same language. Try it if you have never done it before. You will discover the impact of the cost savings policies your company implements without necessarily realizing that the cost is actually only being transfered elsewhere.

Distributors quite rightly represent themselves as a bank and a conveyor belt between the Vendor and the Channel Partner; a direct extension of the Vendor, so when we change the way we package or ship something, we should remember that our logistical extension is going to have to cope with it. They also need to operate efficiently so we should always make sure that our decisions aren’t at the cost of our Channel and that we are always doing what is best for them. Here are just two real life examples:

  • No more packing list! Distributors across Europe started complaining that we were omitting the pallet packing list, costing them additional time to work out what had been delivered. our logistics center confirmed they were being applied as per the procedure…in fact, the new packer in the Dutch warehouse (lots of warehouses in the Netherlands) was 2.10m (6ft 8in) tall (lots of tall people in the Netherlands) and was simply slapping the label on the top of the shrink wrapped pallet where about 1% of the world’s population could see it. A change to the procedure solved the issue.
  • carton1.jpgFinding the colors. I was once told by an angry warehouse manager that they had to open every carton of 8 toner cartridges they received -and they received pallet loads of them every week- each box taken out for the staff to know which color they were to receive in their system.
    • This didn’t seem to make sense until I found that our logistics center was actually re-using old cartons to ship mixed sets of toner.
    • We then found that the cartons had been designed in such a way that once opened, you had absolutely no way of knowing which color was in each box since the markings on the boxes were on the wrong face of the box.
    • Of course, the mixed cartons were never marked as mixed,that would have been far too simple.
    • Finally, we discovered that rather than recommending or enforcing standard quantities (of 8), we were letting our Partners order free multiples. In our western culture, people tend to order metric multiples of 10 or dozens -never multiples of 8. So we always ended up with a mixed carton.

As a result of the strong relationship we built with the logistics teams of our Partners, our Brand became synonymous of ease to do business with. This invariably got back to the senior management of the distributor who would then use their influence to increase their sales of our products. It became a real win-win situation, reducing both our and their cost of doing business.