Post by lidar2 on Jul 29, 2019 11:13:22 GMT
Thinking about it, what would be the downsides for BF if they decided they were going DL only at a predetermined date in the future?
There would be the one-off transitional costs
- They would have to honour all existing pre-orders, but they would presumably stop taking pre-orders for CDs on new announcements, and set limits on the number of CDs for stuff already announced (like they did with Class)
- They would have to sell off a lot of stock cheap, but they do that fairly regularly anyway
- They might have to buy themselves out of a lease on their warehouse, but then maybe JHE owns the premises personally, or else maybe they could sub-let to someone else
- Redundancy costs for warehouse staff
In terms of on-going business, after the one-off costs have been absorbed, what would the ongoing costs be?
- They would lose one route to market, but would that mean losing the customers who buy CDs from Amazon, specialist shops etc.? or would those customers just start buying DL from BF or Audible
- To compensate for the point above they may have to spend more on marketing to raise product awareness, but I would say most customers already find out about BF stuff from the internet, DWM, etc. so maybe not that much more
- Would they lose customers who like the physical product and would simply stop buying? I can't see there being that many who would fall into that category - say if they got Ecclestone, Smith, Capaldi, or whatever story possibility makes your mouth water, would BF fans really not buy on principle just because it was DL only?
With regard to piracy, I don't think it would make much difference one way or another - I don't think it would make them more or less vulnerable, nor would it increase or decease it.
So I think BF are rapidly approaching a point where it makes sense to do it in terms of their business going forward. The only things holding them back would be the one-off costs, which can be managed/reduced, and their own innate conservatism and caution. In my own professional life I always find the killer question is - if you were starting from scratch with a totally free hand, how would you do it? And once you answer that question you can set your direction of travel, it's merely a question of planning and sorting out the practicalities.
That's just my take on it. I've probably overlooked loads of important things