Digital Distribution of Media

1
Digital Distribution of Media
Illustration by Erin Mehlos

• Issues That Arise From The Use of Digital
  Distribution.
• Ross Mcleod Magnus Reid Swaminathan Nandakumar

2
Fields of Digital Distribution

• Music
• Video Games
• Movies
• Software
• Books
• Concentrating on Music, Video Games Movies as
  they are the main areas of the entertainment
  industry seeking digital distribution.

3
Music

• Most popular
• Music industry 31.3 bn
• 5 from online sales.
• Figure to triple by 2010
• In the U.K 10 million songs downloaded legally in
  2005
• With an average of 5.52 per month.
• Examples i-Tunes, Napster

4
Video Games

• Focused on Digital Distribution for many years.
• Downloaded Games Market
• 43 million for 2005
• Estimated growth to 400 million by 2010
• Pc games will be the majority closely followed by
  home consoles.
• Examples Steam (Valve), EA Games

5
Digital Movies

• Hot Debate
• Digital Movie Market
• 10 million for 2005
• Increase expected to 690 million by 2010
• 3 Types of Digital Movies
• Complete download
• Complete download with time restriction
• Streaming
• Example World Cinema Online

6
Issues For the Consumer

• Convenience
• Dont need to leave the home if sufficient
  hardware
• But can have problems with connection
• Memory dedicated to downloading
• Price
• Cheaper than high street
• Global pricing differences
• What happens if problem with product?
• Digital lock-in for consumers
• Hidden overheads
• Distribution costs shifted
• Extra value lost in digital sales

7
Issues For the Consumer Cont.

• Newest Media
• Media is sometimes lagging 1 to 2 days behind
  high street release. In the case of videos can be
  months as a result of waiting until released over
  all global territories.
• Although extra information is cut out, which some
  consumers may favour.
• Consumers Unwilling to Adopt Digital
  Distribution
• Mistrust
• Some consumers not technically inept to use it
• Some countries do not have the infrastructure to
  support it
• Some consider it a passing phase

8
Business Issues

• Large Market Potential
• Field can be expanded
• As either click mortar or independent
  business model e.g. Apple (i-Tunes)
• Barriers To Entry
• Distribution is platform specific
• Difficult for new businesses to enter market

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Business Issues Cont.

• Cutting Out Middle Man
• With no retailer all profit is direct income e.g.
  Steam (operated by valve)
• High street stores may be reluctant to deal with
  business in future if they do adopt digital
  distribution
• Traditional distribution is still dominant
• Move to digital distribution to be thought
  through carefully
• Piracy
• Many companies reluctant to convert
• Movie industry associates advances in digital
  media with piracy.

10
Conclusion

• Many issues
• Not only for consumers but for businesses
• Most high tech businesses may adopt in the future
• How this is handled depends on how it deals with
  the issues we have raised today
• Move to digital distribution to be thought
  through carefully