Hollywood is one step closer to being able to collect more coin from the digital distribution of its movies and TV shows.
A consortium of studios, retailers and electronics manufacturers that are members of the Digital Entertainment Content Ecosystem have agreed on a format that will enable entertainment to be played across a number of digital platforms and devices. The first devices and services using the format are expected to roll out early next year.
While specific technical details have not yet been disclosed, studios will essentially have to create just one standard or high-definition file that can be played on any service or device over the Internet, on a set-top box or mobile device. Studios currently have to create multiple files of their movies or TV shows in order for them to play in various formats.
The creation, distribution and storage of such files has created a headache for content creators and retailers looking to capitalize on the proliferation of devices like Apple’s iPod and iPhone as well as consumers’ growing desire to watch entertainment on their videogame consoles or computers.
During the last quarter, sales of digital content grew nearly 20% to $420 million. The numbers, however, still represent a small piece of what studio homevideo divisions earn.
But introducing one standard file format is expected to increase revenue significantly and provide cost savings as well. With one agreed-upon format, the studios, not retailers like Apple, could also dictate pricing of their movies and TV shows; pricing has proved a sticking point in the past.
DECE’s move, which has been in the works since the org was formed in September 2008, is part of a “Buy Once, Play Anywhere” strategy that will utilize “cloud computing” to power much of that effort.
Through cloud computing, entertainment that consumers buy would be stored in a digital locker and remotely accessed from any device that meets DECE’s format requirements.
DECE has tapped Virginia-based Neustar to operate that digital locker. It’s also approved Adobe Flash Access, CMLA-OMA V2, the Marlin DRM Open Standard, Microsoft PlayReady and Widevine as the five digital rights management formats that can protect the files stored in the locker.
The digital entertainment marketplace is on the cusp of a new era of rapid growth,” said Mitch Singer, prexy of the DECE and chief technology officer of Sony Pictures Entertainment. “The key to unlocking this potential is giving consumers the ‘Buy Once, Play Anywhere’ experience they want. That’s the goal of DECE.”
But getting every major player onboard is key.
Fox Entertainment Group, NBC Universal, Paramount, Sony, Warner Bros. and Lionsgate are among DECE’s 48 members and will back the new format, as will companies including Best Buy, Comcast, Cisco, Cox Communications, Netflix, Ascent Media Group, Motorola, Microsoft, Samsung, Philips, Toshiba and Panasonic.
However, Apple has opted not to go along with DECE’s efforts. Apple’s support will likely prove pivotal in enabling the studios to earn more revenue from digital distribution given iTunes and proliferation of iPods and iPhones. Disney also has gone another route, developing its own cloud computing technology dubbed KeyChest to digitally store and distribute its pics to paying subscribers.