CES 2013: Ultraviolet & Cloud-based Content

After spending much of the past year educating consumers on the merits of UltraViolet, Hollywood is ready for the digital locker service to go mainstream in 2013.

Launched by a consortium of more than 70 major entertainment players, hardware manufacturers and retailers in late 2011, UltraViolet was designed to serve as a convenient way for people to store their purchased movies, TV shows and other forms of entertainment online so they could be played using various devices without worrying about formats.

With more people accessing entertainment on set top boxes and mobile devices, Hollywood saw UltraViolet as a way to sell more of the projects it produces while protecting itself against piracy.

As of December, nearly 9 million people had set up an UltraViolet account, according to the Digital Entertainment Group. But many homevideo executives at the studios say UV will need 20 million accounts to be considered mainstream.

Still the entertainment biz and the technical partners that make up the Digital Entertainment Content Ecosystem are encouraged by UltraViolet’s growth so far — especially considering UltraViolet counted just 3 million registered accounts in June. The DECE doesn’t disclose the average number of films stored in each locker.

Yet what’s helped attract more users are the thousands of back catalog and current titles available via the service from such studios as Sony, Warner Bros., Fox, Universal, Paramount, Lionsgate and DreamWorks Animation.

And UltraViolet is said to have added more than 1 million accounts when Walmart launched a campaign last year to convert DVDs into digital copies for a nominal fee per film and promote its Vudu streaming service.

Now other retailers are jumping on board, promoting UltraViolet to their own customers — a move they hope will also help hype their own digital entertainment offerings.

For example, Barnes & Noble has embraced UltraViolet as a way to stream and download content through its Nook HD+ tablets. At CES, Rovi will announce plans to support UltraViolet through its DivX Plus Streaming system. Best Buy’s CinemaNow has launched a beta program allowing consumers to do disc-to-digital conversions at home. And Redbox will promote the technology through its upcoming Redbox Instant streaming service.

“For the past 10 years, Redbox has been committed to giving consumers affordable access to new-release entertainment,” says Galen Smith, senior VP of Redbox. “This new agreement continues this commitment and represents an exciting new chapter … to explore our consumers’ interest in UltraViolet.”

The additional retail support will be key in broadening the existing education effort around UltraViolet from content creators — considered a top priority for the DECE.

“There will be a lot more to come in 2013,” says Jim Underwood, executive VP of worldwide digital and commercial strategy for Sony Pictures Home Entertainment, a vocal cheerleader among the studios for UltraViolet. “I think there will be more muscle put behind UV by the whole (Hollywood) ecosystem.”

So far, the most effective education technique has been the code and explanatory flyer included with DVD and Blu-ray discs. Consumers may not remember the term UltraViolet, but they understand and appreciate the offer of a “free digital copy” of their film in addition to the physical version, execs say.

Studios are keeping an eye on whether disc-to-digital conversions boost usage of UltraViolet and potential sales in the future.

The fear with home conversion, of course, is a rise in piracy. At present, there’s little to stop someone from converting a film in their library, then loaning the physical disc to a friend to do the same.

“It’s a model we’re watching closely that we think has potential — and we certainly understand why it’s in beta mode at this point,” Underwood says. “There are factors that we want to make sure everyone gets right, but at this stage, it appears the benefits of that model far outweigh the risks.”

The process of loading UltraViolet films for consumers is still less than optimal, though, critics say.

And the promise of being able to watch your film on any device is one that hasn’t completely been fulfilled yet due to different DRM formats and the decision by Apple and Disney not to support UV just yet. Difficulties accessing films through Warner Bros.’ Flixster service also flummoxed some early users.

Those early-stage problems have led some analysts to remain skeptical about the format’s long-term success.

“I’m not convinced UltraViolet is the silver bullet studios are looking for,” says strategic innovation consultant Scott Steinberg. “At the end of the day, a customer is looking to purchase a piece of content and have it run right out of the gate on virtually any device. … Studios, to their credit, are intent on embracing the digital revolution, but they need to be as flexible as possible and keep it as simple as possible. From the customer’s perspective, convenience and comfort win.”

But the user experience has significantly improved since UV’s initial rollout.

And that comes as UltraViolet launched in Canada late last year, and is soon expected to bow in Ireland, Australia and New Zealand, broadening its footprint.

As the user base grows, studios could soon roll out additional incentives to encourage UV’s use.

Sony, for instance, has introduced Movie Touch, which enables bonus features to be accessed as people watch a film. For the holidays, Sony Pictures Home Entertainment also launched Movie eWrap, the first virtual gift wrapping feature for UV, which enables 400 titles to be offered as gifts which are digitally unwrapped with the sights and sounds of paper being torn.

“I think you’ll see people show what cloud-based interoperable solutions can do for the future,” says Underwood. “I think what you’ll start to see over the course of the year is people thinking creatively about how you can show services or features around what you own in your UV locker. I expect the industry will start to run with that.”

CES 2013: Ultraviolet & Cloud-based Content
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