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Players in the DVD, music and video game industry are looking to RFID to reduce out-of-stocks, improve promotions, and cut theft and counterfeiting.
By Elizabeth Wasserman
Jun 01, 2008—Timing is everything when it comes to the release of a blockbuster movie to DVD. Nearly 80 percent of all sales occur during the first four weeks of a new release, according to entertainment industry figures. Pirates of the Caribbean: At World's End, for example, sold more than 13 million copies in its first four weeks of release last year. That's why movie studios and retailers with large home entertainment media sections plan the rollout of a new DVD with precision.

Shipments of the DVD need to be delivered on time. Promotional displays, most built out of corrugated cardboard to hold dozens of copies of the DVD, have to be set up in retail stores to coincide with the flurry of advertisements on television and in newspapers and magazines. And those displays need to be continually restocked with the DVD to meet customer demand.

But all too often, a DVD rollout doesn't have a happy ending. "Right now, there is a black hole in the last hundred feet of the supply chain in the entertainment industry," says Devendra Mishra, a professor of logistics science at Pepperdine University and chairman of the annual Entertainment Supply Chain Academy (ESCA) conference. "The product may be in the store but on a different shelf. The product may be in the back room or the distribution center…. As a result, we have a high incidence of out-of-stocks…and certainly some unsatisfied customers."

Some of the biggest names in the entertainment and retail industries are now considering radio frequency identification technology to help new releases roll out like clockwork. Last September, EPCglobal's Media and Entertainment Group sponsored an eight-week pilot in which DVDs were tagged at the item level and tracked from manufacture through to the retail floor. RFID tags with Electronic Product Codes were placed on more than 12,000 new DVDs from Hollywood studios such as Fox, Paramount and Sony.

The tags were applied during production by "replicators"—companies that mass-produce copies of entertainment media and often package and shrink-wrap the products as well. The DVDs were transported to distribution centers and then to a few Best Buy, Target and Wal-Mart stores in Minnesota and Oklahoma. The RFID-tagged DVDs were read upon arrival at the stores, when they were moved from the back room to store shelves, and for restocking and inventory purposes.

The pilot is one of a series involving the entertainment industry that is being facilitated by EPCglobal, which supports adoption of Electronic Product Code standards to enable accurate, immediate and cost-effective visibility of information throughout the supply chain. "One of the most compelling use cases is to understand if those products get to the selling floor and into a situation where they're available to customers on the appropriate street date," says Gay Whitney, standards director for EPCglobal. "The only way to do that effectively is with RFID technology."

In addition to reducing DVD out-of-stocks and improving promotions, the entertainment industry—which also includes music and video game producers—is increasingly hoping that RFID can help solve some of its other problems, including counterfeiting and theft, and tracking rental media and players. In a 2007 Capgemini survey of entertainment executives, a third said they believe RFID at the item level is the technology with the greatest potential impact on the home entertainment supply chain over the next two years.
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