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APAR's WORKING WEEKEND: E-plex Emporium: The Everything Entertainment Store

15 Dec, 2000 By: Bruce Apar

You know what the problem is with etailing? There are lots, but the most fundamental is that it has failed to respect the rite of passage virtually every new technology must experience before finding a comfort level with the consumer public.

There is a kind of gestation period that leading-edge applications typically go through to smoothe out their functional flaws before being thrown into the unforgiving cauldron of the mass market. This staging phase also enables the innovations to achieve economies of scale in production and distribution that bring the consumer version within an affordable price range.

Most relevant among the many examples that prove the rule are the VCR and the laserdisc. The VCR was a professional broadcast and industrial tool long before Sony launched Betamax in 1975. By then, it was a refined product ready for prime time. By sharp contrast, the random-access laserdisc plunged headlong into the consumer market in 1978 before developing a strong industrial user base and never escaped the long shadow of the VCR, which could pluck programs off TV as well as play them back on prerecorded cassettes.

As etailing’s very soft underbelly becomes further exposed, with casualties now commonplace in business news, it is easier to discern more sensible ways in which the Internet can serve the marketplace not as a standalone service so much as part of traditional storefront retailing.

It’s part of a larger concept for which we have coined the term E-plex Emporium. It is a functional, forward-looking, even postmodern approach to shopping for entertainment goods and services. At its core is the belief that all available tools and techniques must inform channels of commerce if they are to become more highly evolved.

Stores using Internet-connected kiosks to allow customers to order unstocked inventory that can be shipped direct to their homes is a prime example. Early sightings of record stores adding a “burn-your-own-CD” service on the sales floor to accommodate a growing market segment of customers is another.

The appearance of a new entertainment platform invariably brings in tow the content needed to animate a dumb device. In the first phase of distribution, the software is merchandised alongside the hardware until enough users are in place to justify standalone software displays.

Yet, we are only just embarking on what promises to be a protracted period of new digital devices and online services that will need to be fed a steady diet of content. The marketing strategy of razors-and-blades is a recurring article of faith in the home entertainment business. Since hardware, as a Thomson Consumer Electronics executive recently reminded me, such as DVD players are too much a commodity to be provide ample margins, profits must be turned from the software. Getting the hardware (razors) into as many homes and hands as possible is but prelude to offering an endless array of software (blades). Hence, Thomson’s purchase of DVD replicator Technicolor and Best Buy’s acquisition of leading national software merchant Musicland.

The early prototypes of our E-plex Emporium, offering all manner of off-the-shelf entertainment products alongside subscription-based content delivered digitally, are Radio Shack and the similarly-modeled mall stores Best Buy intends to operate in the aftermath of absorbing Musicland.

Think of the E-plex Emporium as a food court for everything entertainment. In one generous space, you can shop for a big-screen TV, a DVD player, a broadband service or satellite dish, a surround-sound system, DVD movies, change your ISP or email account at a service desk, and consult with a personal shopper to ensure all the parts shake hands amiably (a folksy way of saying they are compatible.)

Comments? Contact Bruce directly at:bapar@advanstar.com

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