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Kids & Interactive Media Conference: Retail bottleneck an issue in CD-ROM

Consumer demand for new media products aimed at kids is growing rapidly. But before the developers and publishers of these products can take full advantage of this burgeoning market, they'll have to find better ways of getting their products to their...
April 1, 1996

Consumer demand for new media products aimed at kids is growing rapidly. But before the developers and publishers of these products can take full advantage of this burgeoning market, they’ll have to find better ways of getting their products to their customers.

This is one of the themes that came out of a two-day conference on kids and multimedia held recently in Santa Monica, California, which attracted some 200 senior industry executives.

Clearly, consumers are buying the hardware necessary to broaden the market for new media.

About 18 percent of American households own a CD-ROM player, 39 percent have a home PC and 21 percent own a modem, according to a study of the home market co-sponsored by new media consulting firm Grunwald Associates and New York market research firm Find/SVP.

Grunwald president Peter Grunwald told the conference that the study, called American Learning Household Survey, found that children’s learning was the primary reason (82 percent) for home purchase of a PC.

Yet while a variety of new media providers added to the rosy outlook with descriptions throughout the conference of new and better products in development, the big question looming is how to get these products into the retail channel at a price or value point that will attract parent buyers.

The conference heard that one of the big concerns that parents are raising as they shop for CD-ROMs is replayability.

With the sudden proliferation of CD-ROM titles and new on-line services, branding has become another emerging issue as suppliers seek market differentiation.

While branding may be important, suppliers should be careful not to build image at the expense of continued investment in quality of product, warned Sarina Simon, president of Home and Family Entertainment at Philips Media.

Concern over the retail environment was a recurring theme.

There is a huge distribution bottleneck at the moment, said Ellen Pearlman, editor-in-chief of HomePC magazine.

Pearlman pointed out that the average retailer now carries 200 CD-ROM titles and computer specialty stores are up to 500 titles. Not only is there a battle for shelf presence, particularly for the independent companies, but also the glut of product makes it difficult for salespeople to properly sell each product. This is especially true in retail outlets like drugstores or toy stores that don’t specialize in computer software.

Another significant trend that appeared at the conference was the number of Internet-savvy programs involving direct links between CD-ROMs and applications on the Internet, many of them tied directly to film and television characters or shows.

More information on the American Learning Household Survey can be obtained from Find/SVP at 212-645-4500.

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