What Are the Benefits of Digital Distribution?
There are several benefits to digital distribution.
For one, costs are reduced and profits increase.
There is no middleman, and it’s a far more lucrative route to fans than physical distribution.
But what are the other benefits of digital distribution?
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Let’s take a look at some of the most important ones.
In the past, cable providers could bundle their channels and make them more profitable.
But now, thanks to reduced costs of digital distribution, it is possible to make content available without bundling.
Just like the recording industry, which started to use digital distribution to deliver single-song transactions, the television industry has similarly faced similar concerns with pricey bundles.
This article focuses on the ways in which reduced costs of digital distribution can make content more affordable.
As the shift towards digital media continues to increase consumer demand, traditional media companies are finding ways to capitalize on this trend.
According to a study by Ernst & Young, profits for media companies have increased by nearly 40% since 2010.
This shift reflects a broader trend across the market: companies are looking for more efficient ways to distribute their content.
In addition, traditional distribution has a distinct advantage when it comes to product availability, technical expertise, and customer service.
Moreover, traditional media companies can tap into a much larger tail of product inventory than pure digital players can.
With a sea of disruption, traditional distributors must learn to unleash the power of digital technology to remain relevant and competitive.
To be more agile, distributors must be proactive in meeting customer needs, adapt to market changes, and provide an outstanding customer experience.
PROS helps distributors solve margin leakage and move with the market.
Distributors can increase profits by ensuring customer satisfaction, reducing manual override, and optimizing pricing.
By incorporating the latest technology and focusing on customer satisfaction, they can stay ahead of the curve and achieve profitable growth.
The benefits of a less-middleman distribution chain are many.
For starters, eliminating the middleman means less waste.
When a product is bought directly from a manufacturer, it is shipped directly from the manufacturer to the end customer, reducing the need for a middleman.
Additionally, manufacturers can bypass the retailer and focus on promoting their products directly to consumers.
Ultimately, less middleman means lower prices and higher gross profits.
More lucrative than physical distribution
While the value of physical products may be debatable, they are still valuable from a promotional perspective.
For example, in 2018, three games sold more than a million physical units in the UK alone.
These figures do not reflect the success of free games like Fortnite, which has more than 200 million players worldwide.
According to Piers Harding-Rolls, head of games research at IHS Markit, the shift from physical to digital distribution has benefited the games sector.
Digital sales continue to lead when excluding digital exclusives.
Sony’s full game software sales topped those of Xbox and Nintendo respectively, indicating a distinct advantage for digital over physical.
Nintendo, on the other hand, saw its sales jump 12.3% year-on-year and 104.9% compared to the same period in 2018.
Although the risk of failure is higher in some sectors, it’s lower for distributors of building and metal products, which are often shipped from a central location.
Meanwhile, digital players are increasingly building partnerships with third-party vendors.
Furthermore, because these companies are not built to handle large orders, they struggle to meet the requirements of multicategory distributors.
However, for manufacturers of consumer and industrial products, digital distribution is a much safer investment.