You will be redirected back to your article in seconds

Studios’ digital dreams face marketplace realities

CES Daily Spotlight: UltraViolet

On Jan. 24, Paramount Home Entertainment will do something it has never done before.

The studio unit — which over the years has issued movies for the home market on physical media such as VHS, DVD and Blu-ray — will release the hit horror film “Paranormal Activity 3” not only as a Blu-ray/DVD combo, but also via the UltraViolet cloud-based digital library system.

This is Paramount’s first UltraViolet release, but it joins a slate of 28 similarly released entertainment properties from the homevid divisions of Warner Bros., Sony Pictures and Universal that have already been released or will be by mid-March.

The UltraViolet digital rights library system was created and championed by the Digital Entertainment Content Ecosystem (DECE), a consortium of more than 75 companies, including the four aforementioned major studios as well as consumer electronics manufacturers, big box retailers and technology and video service providers.

Warner Bros. released the first UltraViolet titles — “Horrible Bosses” and “Green Lantern” — in October, and DECE has announced the launch of UltraViolet in the U.K. with the Warner Bros.’ “Final Destination 5” as the first title for that market.

“We are at the very, very beginning (of UltraViolet),” says DECE president Mitch Singer, CTO of Sony Pictures, who notes that the only existing service for accessing UltraViolet content is Warner Bros.’ Flixster app for the PC and Mac platforms and devices. “You could almost consider this a beta launch.”

Plans for the coming year include the roll-out of UltraViolet in Canada and other still unidentified territories, as well as the introduction of a common file format for downloads, making functionality consistent across all UltraViolet retailers.

Rumors have swirled that Amazon may declare its support for UltraViolet at CES, with a plan to let consumers pay 99 cents to convert a DVD or Blu-ray they own into a digital copy stored online.

Many DECE members are tight-lipped about their UltraViolet announcements. “It’s a hyper-competitive market,” says DECE general manager Mark Teitell. “Of the 75 companies in the consortium, about half of them are keeping quiet. Companies launching UltraViolet in the near term will be pioneers.”

That sluggishness in getting on board is a chief obstacle to UltraViolet’s development: no manufacturer, retailer or provider of download and streaming services has yet unveiled plans to integrate UltraViolet.

For Screen Digest analyst Tom Adams, the near-term priority is to get Best Buy, Vudu, Blockbuster and any other DECE member that already have a relationship with the consumer to launch in 2012, so that by next Christmas the consumer sees that UltraViolet is real. “I can guarantee you the studios are pushing very hard for them to do just that, and pushing the holdouts that haven’t embraced the standard,” Adams says.

But there’s another issue that could trip up UltraViolet. For studios, UltraViolet is a way to add value to DVD and Blu-rays, with the hope that sales of packaged media will cease its downward spiral. But what UltraViolet offers so far — a digital copy — is something that consumers have shown little interest in.

Adams reports that redemption rates of “old-style digital copies” ran up to 25% for the biggest titles but averaged in the mid-teens — not compelling numbers. BTIG analyst Richard Greenfield adds that pricing of UltraViolet digital files vis-a-vis rental prices is key. “UltraViolet is all about the value of ownership,” he says. “You can reset interest in ownership if it costs $9 vs. $5 to rent. But if a Blu-ray disk or digital file costs $20, it’s a challenging proposition.”

DECE members also have to re-educate consumers who’ve had bad experiences with digital downloads.

“We thought digital direct-to-consumer would be a huge business, but it’s been relatively flat,” Singer says. “Consumers didn’t want to download content because they thought it would fill up their hard drive and crash it. They were concerned they wouldn’t be able to share content on different devices and there was no way to aggregate their libraries.”

To dispel fears and get the UltraViolet message across, participation of the big box stores and streaming services is crucial since they’ll be heavy lifters when it comes to consumer education. So far, they don’t appear to be rushing in. “It doesn’t seem that anyone is terribly interested,” says Greenfield.

Sony Pictures Home Entertainment exec VP John Calkins notes that studios will set UltraViolet prices and that, when it comes to marketing UltraViolet, Sony anticipates that “the retailers will look to the studios to refund some marketing costs and to help work with them on in-store collateral or programs that will get the right message across to the consumer.”

Building a so-called ecosystem and promoting it while it’s under construction is difficult. SNL Kagan analyst Wade Holden believes the idea of UltraViolet is headed in the right direction. “I can’t help but think that consumers will be excited about accessing content anywhere, on any device,” says Holden. “For the tech savvy people who are the head of this wave, UltraViolet is what they’ve been waiting for.”

The question is whether the studios can exert enough pressure on the other DECE members, and entice other key players to join in, so they can build the momentum necessary to create a truly cloud-based digital content library system.

Turf war puts bucks in flux

More Digital

  • Mueller Report Book Editions Top Amazon's

    Mueller Report Book Editions Shoot to Top of Best-Seller Lists at Amazon, Barnes & Noble

    Robert Mueller is now a best-selling author. Book publishers’ forthcoming editions of the special counsel’s report zoomed to the top of the Amazon’s and Barnes & Noble’s lists of book best-sellers Friday. That comes a day after the report was publicly released, culminating the nearly two-year investigation into Russian interference in the 2016 U.S. election [...]

  • Marques Brownlee - Retro Tech

    YouTube Orders Marques Brownlee 'Retro Tech' Original Series

    YouTube has turned to one of its homegrown stars — technology vlogger Marques Brownlee, aka “MKBHD” — for its newest original series. The video platform has greenlit series “Retro Tech” featuring Brownlee, in which he’ll unbox and review vintage technology products that have defined pop culture. The show, slated to debut in December 2019, follows [...]

  • Netflix Tests Random Episode Button in

    Netflix Starts Testing Random Episode Button

    Netflix is testing a button to play random episodes of select TV shows, the company confirmed Friday morning. “We are testing the ability for members to play a random episode from different TV series on the Android mobile app,” a Netflix spokesperson told Variety. “These tests typically vary in length of time and by region, [...]

  • Netflix Our Planet Sophie Darlington

    Netflix's 'Our Planet' Roars to Life With Work by Top Wildlife Cinematographers

    In terms of scope, production time and — very likely — budget, Netflix’s “Our Planet” is one of the most ambitious projects from the streaming service to date. Narrated by David Attenborough and made available worldwide on April 5, the goal of the eight-part series is to capture diverse habitats across the globe and highlight [...]

  • Amazon

    Amazon Music’s Free Tier Is More Advertising Play Than Spotify Killer, Analysts Say

    When news began to spread last week that Amazon Music’s long-anticipated free streaming tier was imminent, headlines emerged about its threat to Spotify and Apple Music, with some stories saying that Spotify’s stock price dropped in response to the news. But not only was today’s launch of the free tier basically a soft one — [...]

  • Gay Chorus Deep South

    Why Airbnb Produced Documentary 'Gay Chorus Deep South,' Its First-Ever Film (EXCLUSIVE)

    The latest player to hit the film-festival circuit may be a bit unexpected: Airbnb, the travel-accommodations booking marketplace, developed, financed and produced documentary film “Gay Chorus Deep South,” set to premiere at the 2019 Tribeca Film Festival on April 29. It’s the company’s very first feature film. Directed by David Charles Rodrigues, “Gay Chorus Deep [...]

More From Our Brands

Access exclusive content