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Target Launching Digital Movie, TV Service on Oct. 1 (Exclusive)

Retailer gears its entrance into Internet video biz on simplicity, access to next-day TV episodes and parental controls

Retail giant Target will finally plant a flag in digital video, aiming to debut the Target Ticket service Oct. 1 — or possibly sooner — with a collection of about 30,000 TV and movie titles for purchase or rental.

Target is late to the fast-growing digital-video market. But the company is banking on providing simplicity, parental controls and access to early electronic sell-through content to lure customers to Target Ticket.

Rivals like Walmart and Best Buy already offer digital-video services, while Internet companies Apple and Amazon.com have well-established footholds in the space. But about half of Target’s customer base has never downloaded or streamed video entertainment, presenting an opportunity for the retailer to gain share, according to Anne Stanchfield, Target’s divisional merchandise manager of entertainment.

“The industry is not brand-new at this stage, but there is a significant portion of our guests who haven’t adopted digital entertainment yet,” she said in an interview.

Target Ticket’s scheduled public launch date is Oct. 1, but “if it is ready before then we will absolutely open it up,” Stanchfield said.

The company has deals for Target Ticket with major studios, including Disney, Paramount, Sony Pictures Entertainment, 20th Century Fox, Warner Bros., Universal and Lionsgate. TV networks in the mix include ABC, AMC, CBS, CW, Fox, FX, HBO, The WB, Nickelodeon, MTV, Comedy Central, NBC, Showtime, Starz and USA Network. TV content is available for purchase only but may be streamed or downloaded.

A differentiator for Target Ticket will be access to early EST, including day-after-broadcast TV episodes and movies before they are available on DVD. The service is compatible with UltraViolet, the digital-locker system created by Hollywood studios, to let Target Ticket customers import movies they have already bought from their UltraViolet account.

The overarching goal for Target in designing the service, based on customer surveys, was to provide an Internet video service that was simpler and more family-friendly than alternatives in the market, Stanchfield said.

SEE ALSO: Early EST: Studios Find Their Best Hope for Offsetting a DVD Decline

Target Ticket users will be able to stream or download video to an array of devices, including PCs, Macs, Microsoft Xbox consoles, Apple iOS and Android devices, Roku set-tops and Samsung connected-TV devices. The company’s goal is have an app ready for every Internet-video device by the end of 2014.

Target Ticket pricing will be roughly comparable with similar offerings. Theatrical title “Now You See Me” goes for $14.99 in standard definition and $17.99 in high definition. A season of “Game of Thrones” is priced at $28.99 (SD) and $36.99 (HD).

In another bid to capture share, new Target Ticket customers will receive 10 free movie downloads when they sign up, with the ability to select from among 30 titles (which will include “21 Grams,” “Rango,” “Office Space,” “Hall Pass” and “Man on a Ledge”). In addition, customers with Target’s RedCard credit and debit cards will receive 5% off all purchases.

For parental controls, Target is working with Common Sense Media, a not-for-profit org that rates movies and TV shows. The Target Ticket service allows users to create up to 20 profiles, restricted based on various criteria. “It’s really best-in-class parental controls, and it was a big ask from our guests,” Stanchfield said.

Target did consider launching a subscription-style service, a la Netflix. But Stanchfield said the company’s market research showed customers wanted “the newest content available” — in other words, titles in the EST window, which are not available on subscription VOD services. More to the point, for Target to assemble a subscription VOD service would be a far more capital-intensive undertaking, requiring significant upfront and ongoing licensing fees for streaming rights.

The service is hosted at its own website, TargetTicket.com, but will be integrated with Target.com to link to Target Ticket if content users search for is available there. This summer, Target kicked off a beta test with about 10,000 employees based at the company’s Minneapolis headquarters, after beginning work earlier this year on the service with technology and content partners.

Target Ticket is “definitely an evolution that we will build and refine,” Stanchfield said.

Target, which had $73.3 billion in sales for the fiscal year ended Feb. 2, 2013, is the second-biggest U.S. retailer after Walmart.

According to the company, Target’s customers have a median age of 40; a median household income of approximately $64,000; and about 43% of them have children at home.

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