With the rise of broadband Internet, mobile devices and the development of online secure payment system E-commerce is developing further on a large scale. Companies such as Amazon, Ebay and Taobao have defined and master the concept of E retailing in which consumers are able to find and buy a range of physical products online. As the digitalization sets forth and consumers continue to use Internet connected mobile devices such as iPads, Laptops, Smartphone’s consumers are not only expecting to buy physical products online but also to view, buy and storage digital content with their mobile devices. Movies, music, books, magazine etc are all being made available in digital format to enable the consumer to enjoy their digital content anywhere, anytime and on any device. This development opens a new type of retailing called ‘digital content’ retailing.
Apple paid close attention to this development and with its ‘iTunes store’ the company has been able to build an ‘Apple Eco System’ in which consumers can buy anything ranging from personal devices to personal entertainment. The development of the iTunes store took off when Apple began to operate in the mp3 player market with the introduction of the “iPod”. After the success of the iPod, it was a natural step for the company to start offering legal digital music to their iPod customers. However, the major challenge for Apple was to convince their consumers and the content producures (such as record Label companies) that households are able to buy music from a computer company… No surprise that Apple has invested millions in building pyhsical retail shops to change this branding perception.
Besides the use of the Internet as a retailing platform, the use of the Internet as a broadcasting platform is becoming increasingly popular. With unlimited broadcasting capacity, leading broadcasters such as ABC and HBO have invested significantly in online broadcasting platforms and have very strong brand images to secure a position in this new broadcasting market. The rise of the Internet as a broadcasting platform brings the marriage of Internet and television a step further. Several companies such as Google and Apple try to enter this market. The integration between Internet and television will unleash an explosion of business opportunities in terms of E-commerce. Consumers will be able to view, buy and rent anything via their internet connected TV.The popularity of Web-to-TV devices depends in part on the amount of programming available. Apple has already struck deals with Walt Disney Co’s ABC, News Corporation’s Fox and Netflix for some limited TV shows and movies.
The interesting part is that Netflix currently has such a large distribution channel via their loyal customers that they are pushing own production. It would be interesting to see when Netflix starts to offer in video or tv purchases. This opens up a new business model for Netflix. Imagine buying a Star Wars Drone when watching the latest episode on Netflix. However this is not something new, in September 2010, Apple introduced a less expensive, smaller version of Apple TV for $99. The move stepped up the battle with the likes of Google Inc and Microsoft Corp, which are all vying for control of the digital living room. Microsoft (not forget Sony) is in talks with media companies to license TV networks for a new online pay-television subscription service through the Xbox and PS. In the United Kingdom, Microsoft already have launches its MSN video player and uses their home brand Zune to offer entertainment on the phone, Xbox and pc. The company is trying to push their services via their Live ID users or hotmail users.
The competition in this digital content retailing continues to become fiercer as both producers and distributors of physical products are cooperating with each other to offer digital content online. For example major film studios have signed cooperation deals with large (e) retailers such as Amazon, Wal-Mart and Tesco to offer to view/rent and purchase movies online. Under different brand names such as AmazoneLoveFiLM, Vudu (Wal-Mart) and BlinkBox (Tesco) these companies are providing their customers not only the possibility to purchase the physical DVD in the supermarket but also to purchase the digital version, allowing the consumer to view the digital content anywhere, anytime and on any device.
In the Publishing Industry the larger Publishers are cooperating with Tablet companies to offer their digital content for their customers and subscribers. Apple continues to embrace more publishers in their ecosystem such as Time Magazine by offering subscribers of Time the possibility to view their favourite magazine for free on the iPad. However, the digitalization also threatens the traditional publishing industry as top authors signs exclusive deals with e.g. Amazon to offer their work on the Kindle devices and on the Amazon Ebook store. This confirms the continuous rise of electronic book market and the fears of publishing houses, which are bypassed by big-name authors, in search of a bigger cut of the sales profits. Also, exclusive author and book deals for the Kindle will easily set apart Amazon’s e-book reader from fierce competition from the likes of Barnes & Noble and Sony.
All in all, these developments in the digital retail industry are just the start of a new area. Both software and hardware companies are cooperating more intensively with each other, new partnerships are developed and new distribution channels are created via investments in traditional retail players. For the consumer the rise of mobile devices and cloud computing offers them the ability to purchase any content (digital and pyshical) any time and any where. Their consumer path differs per day, creating a challenge for the suppliers and pushes them to build and improve their digital infrastructure (online & offline). And don’t forget it is estimated that in the future over 25 billion devices will be connecting and interacting with each other, making the R(e)evolution of digital content inevabitable.