Additionally, there are several opportunities that are present to further ensure SPHE's success. Among them are digital downloading/streaming; alternative distribution formats including MOD and flash drives; increased retail space; and portability and connectivity on any desired playback devices.
VB: We understand that you recently began overseeing Sony Pictures’ downloading/streaming operations. How does that business fit with your packaged media business?
Bishop: While there are certainly key distinctions between digital distribution and physical media, there are also a number of similarities between both businesses. The transactional models, specifically electronic sell-through (e.g. iPod downloads) and VOD, are similar from a consumer standpoint to our traditional sell-through and rental business in that we are trying to drive consumers to buy and rent SPHE products. These transactional models behave similarly and need to be managed coherently, which is ultimately the rationale for our reorganization. We can now manage the business across all titles, optimize marketing across all formats and provide multiple delivery options for our consumers.
VB: How do you plan to maximize both physical and digital distribution? How might that be different from how you managed blockbusters from a couple of years ago?
Bishop: By utilizing both physical media and digital distribution, we’re able to offer a choice to the consumer. This choice allows them to enjoy their movie in pristine high-definition in the home, in standard-definition (for those who have yet to upgrade to high-def), or as a download for on-the-go viewing via their PC or favorite portable device. We also offer the option to purchase or rent in a variety of formats, rounding out the wide array of options we can provide today’s consumers.
In the past, we were more focused on the breakdown of how many DVD units were needed for sell-through and rental. But now, as the home entertainment spectrum has rapidly expanded, we must look at successfully fulfilling all methods of distribution. In order for the home entertainment industry to continue to grow, we must be smart and adapt to ever-changing consumer behaviors and the evolving landscape of physical and digital media.