The question has been asked, "Why are there no small stores in the first set of pilots for NACS Media Solutions?" Considering all of the factors at play, the answer could be presented as quite complex, but here is the simple reasoning behind the decision:
1- We had to keep the initial pilot under 10 stores, and initially we planned on only five. To be able to evaluate some of the system capabilities, we needed to be able to maximize the total number of transactions that might occur during the initial pilot period. Good IT project management suggests that we control pilot diversity at first to allow for better consistency in the process of evaluating the technology capabilities.
2- For the initial pilots, we are working only with commercial movies and TV content, and we had the understanding that the studios wanted evidence that some well-known larger campuses would have interest in the initiative. This contributed to our ability to get more favorable pricing, which we will be able to pass on to stores of any size. Similar requirements associated with the content licenses restricted our ability to include any Canadian stores in the initial pilots as well. We hope to move beyond those restrictions soon.
3- Because the initial content consists of only commercial movies and TV, based on our financial analysis, stores would need to conduct a certain average number of transactions per day to make the initiative profitable. That threshold was greater than what most smaller stores are likely to experience in a day for movie content. However, as we add other forms of content, the value proposition will increase and the barriers to profitability will drop. At least one small store we reviewed the pilot criteria with agreed that it was better for a store of their size to wait to the next phase to participate.
4- In the first phase of pilots we are assessing the pure technology, and gathering initial information to assist stores in determining how to sell or market the content offerings. We need to ensure enough initial transactions to be able to evaluate the viability and appropriateness of the selected partners and the solution relative to the needs of the college store.
Our goal is to design a solution that is scalable for stores of all sizes to the best of our ability. Indeed, the primary mission of NACS Media Solutions is to enhance the capability and credibility of the college store industry as a whole in the delivery of digital content. To be successful in that mission, we recognize that any solution that does not work for small stores in addition to large stores, will not be effective. We plan and hope to have 15+ small stores participating by July 2009. Small stores will help us assess some of the scalability and feasibility dimensions so that we can continue to refine and scale the service for all NACS members. There are many decisions yet to be made and small stores should not fear that the pilot stores are going to make all of the decisions for the industry about what the final solution looks like. We recognize that the solution will need some modifications to work for all stores and that broad-based and diverse participation in the solution design will yeild a more robust end product that will provide greater satisfaction for a wider range of stores and their customers.