Old Discs Get a Chance to Spin Again
Having established itself as one of the UK's go-to spots for selling entertainment products online, Entertainment Magpie is now setting its sights on the U.S. with the launch of Decluttr.com.
In this TechNewsWorld podcast, we chat with CEO Steve Oliver about how the digital revolution affects a business model predicated on physical entertainment media; the global network that underpins his company's business model; and how Americans' unfamiliarity with magpies -- a black and white bird that collects shiny things -- forced Entertainment Magpie's stateside name change.
Here are some excerpts:
Listen to the podcast (13:09 minutes).
There's a big section on the Decluttr website -- if I can read one section here, it says: 'You can choose from thousands of UPS and USPS shipping locations; you can choose to have your item collected for free using USPS postal carrier; it's super-convenient; it's free; UPS shipping locations include any UPS Store, any UPS authorized retail outlet; you can even hand your delivery box to a UPS driver; any UPS drop box.'
So this seems to really be something that you all emphasize and that you want to make sure people know, 'You don't have to do too much work!' Is this something that you've found in the past, that people are kind of wary of -- you know, 'I'd like to sell it, but I don't want to mess with the shipping and stuff.'
Steve Oliver: Absolutely, David. We've found it to be the very core principle of the concept we've established in the UK. Within five-and-a-half or six years, we've become a hundred-million sterling turnover business, and at the very heart of our concept is making it hassle-free, easy, convenient ... .
Once they've packed their box, they're sent a label, and it needs to be really, really easy for them to send it to us ... .
TNW: What do you all do with it once you get it? You've stressed that it's easy for the customer to go through their steps, but then what happens to the products that they've been paid for?
Oliver: The other thing I should stress is that we'll take absolutely everything, so we don't do any cherry-picking. And that gives you a clue of what we're going to do with it, because actually, we do a whole range of things.
Some of the lower-quality items will simply be recycled -- rather than go into a landfill, some of the CDs and DVDs will literally be used for car headlights; cases can be mulched and used for anything from road surfaces to paper cups that come from the water cooler.
But actually the majority of the products are thoroughly refurbished. We can't obviously reproduce or repair any artwork, but as long as the disc and case are structurally sound, we can refurbish it. And then we've got a whole range of selling channels, both online and offline. So we'll resell those items. For instance, in the UK, 50 percent of our online sales are being sold internationally, and we're selling a lot into developing nations. So we're selling a lot of our products into India, the Far East, South America. We've got a whole different range of selling channels and platforms.
TNW: One thing I want to ask you about is the idea of entertainment media, and that entertainment media is a physical entity. You mentioned that you all started in 2008, and so much has changed with the way that people consume media now compared to then. I mean, it's readily available on iTunes or it's downloadable. It can be transferred on a USB stick or somebody can drop it to somebody else through Skype or Dropbox. The less scrupulous among us might use The Pirate Bay or other file-sharing sites.
Do you have any concern that there will come a point where the format of the sort of entertainment that you all work with becomes so increasingly digital? I know last year Nielsen released a study that said digital album sales now comprise 43 percent of all full-length music sales. Is that trend something that concerns you at all?
Oliver: I think that's interesting that you actually mention the stats. It is about 60/40, and go and grab an average consumer off the street and say, "Are more albums consumed digitally or physically at the moment?" I guarantee that most people will tell you it's digital. But actually, in the UK and in the U.S., the majority of albums are still being consumed on CD.
When you look at the nature of what entertainment media is, it's a hobby and it's a passion. It's something that people enjoy buying and collecting and owning and displaying in their households. It's also something that people enjoy buying as a gift. It's a bit of a cliché, but you can't giftwrap a download. People enjoy touching it, feeling it, reading those covers. And if they can buy it in as-good-as-new condition for less than half price, that's a great way to consume entertainment media going forward.
It was Steve Jobs himself a few years who said that [for] the average iPod, 90 percent of the tracks on the iPod have been sideloaded instead of downloaded. So people are still -- even though they're complementing the two -- they're using physical and digital at the same time. I know I do.