Distributors as Entertainers

Rick McCarten

 

Rick McCarten

By Rick McCarten

Here is an interesting fact: despite the huge expansion of recorded music tracks, the number of hits per year has remained the same. In 2007, there were 3.9 million music tracks produced in America. In 2016, there were 8.7 million tracks. Despite the increase in production, the top number of hits remained the same.

The Internet exposes more variety of music to listeners, but it actually has the opposite effect because it tends to expose more popular songs to more people. Regional or marginal hits don’t get increased exposure.

The same thing is true with movies. The top five box office movies in 2016 were all from Disney. As more cinema houses with multiple theatres pop up around the country, and as more movies are produced and distributed, the theatres still all show the same movies.  

Rather than becoming more diverse with access to the world around us, we are becoming more singular in our likes and fashions.

According to an article in The Economist, people are overwhelmed with choices and will take the easiest, fastest and most popular route, rather than try to find something new. If you only go to five movies a year, why not just go to the most popular ones, the ones showing at your local cinema? The article also stated that Disney has taken this discovery on strategically. Rather than producing a vast range of movies and hope that some will be hits, they have concentrated on producing big hits only. This strategy has led them to purchasing big movie producers like Marvel, Pixar and Lucasfilms.

“There is almost no limit to the supply of entertainment choices in every category, but people’s awareness of these products and their ability to find them is constrained by the time and attention they can spare. Overwhelmed by the abundance of choice, they will generally buy what they are most aware of.” (The Economist, February 11, 2017)

How does this relate to electrical distributors? Distributors can use this strategy for their own branding. Don’t appeal to a mass market; instead, specialize in what you do very well. Don’t try to get 100% of all customers’ attention — get the big ticket items, the margin drivers. Become known as the house that does that something really well and can service it.

3 things that we can learn from the entertainment world

  1. Customers don’t want the Internet to make their lives harder. They want it so information is easier to find. Customers will move towards the easiest solution, not one that is complex and more detailed.
  2. Sellers that provide easier solutions will be bigger and will dominant their respective marketplace.
  3. The Internet will allow sellers to reach more customers, but the vast majority of customers will not use the Internet to reach more sellers.

Recognize that just because customers can go somewhere else they don’t have to. There is a lot of reason for customers to stick with you, providing you offer them special services and allow them to grow.

Rick McCarten is VP, Operations, Electro-Federation Canada.

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