Consumers DO NOT want:

* Strict DRM policies that restrict the usage of purchased products.



Digital 
Distribution
    * 20 million people connected
    * 350+ PC games
    * Worldwide in 21 languages

    * 100% Year-over-year growth since 2004
"Steam"
Games
Videogame online stores
by
Friedrich 
Bode
Janos
Bluhm
The challenger: "Netflix"
    * Digital & physical movie rental service

    * 'Watch instantly' on PC, Mac, TV
    
    * Available only in the US
   

    * New games, old games, indie games ...
    
    * 24/7 availability  
    
    * Portability of content and files 
    
    * Anti-cheating tools
    
    * Auto-updating & version control 
   
    * Community tools (friends lists...)

Consumers want:
Companies want:
Music
Movies
"Entertainment as a service"
- Gabe Newell 
    * Direct communication to customers 

    * Performance data

    * DLC, subscriptions and micro-transactions

    * Piracy protection 

    * Auto-Updating
 


   * INDIRECT customer relationships
 
   * PRODUCT orientation 





The old way of entertainment: 

The new way of entertainment: 


Video game sales numbers only account for traditional brick and mortar retail!!!
"iTunes"
   * Launched in 2001, iTunes Store launched in 2003
   
   * 8 billion songs sold since 2004
   
   * 11 million songs, 3.000 movies, 250.000 TV-Shows

   


   * Forrester Research: 
     "Online business will overtake CD sales in 2012."
   * 24/7 availibility
   * Local independence
   * Buy single tracks off albums
   * Unlimited "shelf space" 
     (big selection of titles)
   


* iTunes eases the effects of digitalisation 

* Piracy decreasing!

* Decline in CD sales still continues...

* Legal music streaming services such as 
"Spotify" gaining popularity!



Recent trends:
* What impact does digitalisation/
the internet have on consumer behavior?

* How do media industries face this trend?

* Which strategies help companies to 
adapt succesfully (which ones make them fail)?

Consumers DO NOT want:

* Aggressive copy protection software 
that causes trouble for legitimate buyers 
(can be cracked anyway)!

 

70% 
market share
Key questions:

Consumers DO NOT want:


* An outdated selection of available movies!



Valve Software
Music CD sales:
Consumers want:
Thank you for your time!
Conclusion:
- Steve Jobs, CEO of Apple
   * DIRECT customer relationships

   * SERVICE orientation 
Consumers DO NOT want:


* Strict DRM policies that restrict the usage 
of purchased products. 

Consumers DO NOT want:


* To wait for days until they can watch a movie.





* Service is king!
* Stop wasting time, ressources and customers while fighting
the inevitable!
* Be committed to make drastic changes to your business model!
* Each media industry is affected by digitalisation 
(some more than others but that is just a matter of time)
Consumers DO NOT want:

* To hear that single-parent moms get sued by record companies.

The "old" movie rental model
The problem:
Conclusion:
Conclusion:
Conclusion:
39,8 Billions USD
30 Billions USD 
2009:
1998:
 (Yet one legal download accounts for 8 illegal ones...) 
Digitalisation has changed 

the music industry forever!
Digital distribution creates opportunites for game developers and risks for retailers!