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Screen Magazine - Index

Screen Magazine - Screen Magazine: Vol. 29, Issue 11a - Index

to come. There is no physical inventory investment because
there is no inventory – ever.
Once the order is placed, content moves automatically from
server to robotic machines in minutes, along with label art and
packaging instructions. The machines burn the DVD, apply fullcolor
art, print packing wraps, and apply a recipient specific
bar code to each item.
Fulfillment operators scan the barcodes, assemble and
package the products according to computer generated
instructions, and attach on-demand printed shipping labels. In
the time it takes the average fulfillment house to pull a product
from the shelf, DVD on-demand companies now make and
ship product from scratch.
Bandwidth is not an issue with a DVD. Consumers can receive a
DVD in close the same time as it would take them to download
it over a 180k DSL connection, and they can watch it in highdefinition
on their flat screen plasma TV.
For content owners, MOD offers an equally compelling benefit.
Niche titles can contribute incremental profits on as little as 15-
20 units sold per year.
MOD Economics
Manufacturing on-demand changes the economics of long tail
content which we define for our purposes as titles that sell less
than 250 units per year. Consider the following comparison:
In the diagram below we outline the initial cost of bringing a
single title into production. The metrics include replication cost,
loading costs, MOD cost and fulfillment costs.
For purposes of “apples to apples” I’ve set any integration or
web development fees at zero for the moment.
Content Library information
Enter number of titles in the
collection
Enter average annual
volume of DVD units per title
Enter the average selling
price of the titles
Manufacturing and
fulfillment information
Enter cost of disc
manufacturing
Library
Data
1
200
22.95
On-Demand
Information
Conventional
Fulfillment Info.
$4.00 $1.20
Enter cost of fulfillment $2.00 $2.00
Enter monthly storage/
management/carry costs
Enter cost of capital/
opportunity
Program startup information
Initial Integration including
web development
$2 $14.50
0.70%
$ - $ -
Title loading $15.00 $15.00
Other start up costs
Initial inventory of
replicated discs
$1,200.00
Total start up costs $15.00 $1,215.00