Read a very interesting article today in the International Herald Tribune (IHT) regarding how the Movie Industry is evolving and hoping to avoid a Napster moment and hoped to match Apple’s iTune operations. Watching this video, “The Many Faces of SAP at Apple, Part I”.
Learn why the movie industry must get the payment bundling process right using Apple iTunes as an example and how SAP can help
which is a very interesting presentation on how SAP is used at Apple, a key message jumped out with regards to what the movie industry has to get right: The way credit card charges are handled by Apple.
Though the presenter doesn’t go into too much detail, what is stated is that at .99 cents a clip, and many thousands to millions of these tiny charges being made per day, if Apple had to pay the per charge processing fee usually charged by the credit companies, they would not be able to make this business model work.
It is simple, really!
They must get two elements right to stay in the game and remain profitable:
There are, of course, many other necessary conditions which are not sufficient by themselves to enable the movie industry to avoid getting Napstered:
The price point needed has already been found-the Red Box Movie rental model seems to have hit it. However, it has a couple of limitations:
Now that the price point has been found, the next step will be for the Movie Industry to arrive at the same ‘bundling’ of payments deal with the payment networks, i.e., Mastercard, Visa, American Express, Paypal.
Of course, all of these business processes need a highly advanced IT infrastructure, led by an end-to-end Business Intelligence system.