Retail Giant Tesco to Bow ‘Digital Locker’ Content System
LONDON -- British global retail giant Tesco will launch a “digital locker” system later this year designed to ensure that when customers buy music or movies on packaged disc, the content will play on whatever hardware the customer owns, the CEO of the company working with the chain said Thursday at the Futuresource Entertainment Summit. The system will be under the control of Tesco’s Clubcard customer loyalty program said the executive, Richard Bron, CEO of Blueprint Digital.
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Most consumers are not tech-savvy, Bron said. He said the average customer “just knows how to press Open, Close and Play. People regularly buy a digital camera and then a month later when the memory is full they bring it back and ask us to develop the film.” Given that naivete, content owners “are confusing the marketplace with ‘digital copy’ discs” released with DVDs and Blu-ray movies, he said. “There are different systems and no consistency. They are creating the perfect storm for big box retailers to take back control in a market where content suppliers have become retail competitors to bricks and mortar retailers."
As customer loyalty programs go, Tesco’s Clubcard “is the biggest in the world,” Bron said. “We hold a massive amount of data on what our customers do and like. We already have a transactional relationship with our customers and rewards schemes. We will use this relationship for digital sales, but start with the sale of a disc, because discs are what customers really understand. The sale of the disc then brings online content and rewards with it."
In the Tesco system, the customer buys a CD, DVD or Blu-ray and takes it home, with the purchase logged at the checkout and tied to the customer’s card account, Bron said. This logging automatically makes a digital copy of the content available online for the customer to access, any time later, via an Internet TV, computer, phone or other portable device, he said. The customer need not take any further action, like copying a disc to a computer, he said.
"In the past people have gone out and bought the same titles on VHS and DVD and BD and so on, whatever the latest standard was,” Bron said. “But in the digital world there are no standards. It’s crazy. Insane. You buy for one digital device and it won’t work on another. People are competing to sell titles that won’t work on other devices. But customers won’t get fooled again. They now want to buy the title, not the format. Because there are no standards, we want to sell the disc and then put the title in an online locker that will be interoperable with all devices.” Bron acknowledged there “clearly has to be control,” such as limiting access to a specified number of users or devices for download or streaming. But “this can be done with the Clubcard,” he said. “It’s a very complex issue but you can expect to see this start in October. Customers will be able to buy titles from Tescos digitally. Then over the following months retailers will start to work together.”