The major film studios think they've found a way to sell and deliver movies online. Will consumers buy it?
By Robert Levine, contributor
FORTUNE -- Consumers who recently purchased Warner Brothers' final Harry Potter film on DVD or Blu-ray found a surprise in the package: a digital copy of the movie in the new UltraViolet format. Although the name is not yet familiar, UltraViolet represents Hollywood's first step into the cloud -- the much-hyped idea that media will be stored on remote servers and accessed by various devices.
The idea behind UltraViolet is simple: The format allows buyers to own rights to films, which they can store in a "digital locker" and access via various Internet services. It's potentially a huge convenience for consumers, who now have a dizzying number of devices (phones, tablets, computers) on which they can watch video content, and indeed, some 750,000 households in the U.S. and Britain have set up UltraViolet accounts, its backers say.
For the studios the stakes are high: DVD sales, which peaked at $15.5 billion in 2004, have stalled as consumers have turned to streaming services such as Netflix (NFLX) or, worse, illegal downloads. The studios that have announced releases in the UltraViolet format (Fox is expected to announce soon; Disney (DIS) remains a holdout) believe UltraViolet will help goose home video sales by enabling consumers to build a remotely stored library of movies. "We know consumers like collecting movies," says Mitch Singer, president of the Digital Entertainment Content Ecosystem, the consortium that controls UltraViolet.
5 ways the cloud will change in 2012
The consortium believes the UltraViolet format addresses industry and consumer concerns around compatibility and piracy. Working with tech company Neustar (NSR) the group developed a system that operates more like an entertainment ATM. When users sign in, it queries a central database to see what movies they have rights to watch -- much as an ATM checks how much money cardholders can withdraw.
The format isn't without its challenges. Setting up a digital locker takes time. Customers must first create an UltraViolet account; then, to watch movies online, they sign in to Flixster, a movie site operated by Warner Bros., which like Fortune, is a unit of Time Warner (TWX). (Other UltraViolet movie-viewing sites will debut this year.)
But the biggest hurdle could be competition from technology companies such as Apple (AAPL), which has its own iTunes ecosystem for movies. Amazon (AMZN), on the other hand, has signed a deal with one studio, which it didn't name, to sell UltraViolet films.
Despite the challenges, studio executives are bullish on the format. For the first time they're able to offer on-demand video on multiple screens, and may even outfox pirates. Talk about a Hollywood ending.
Robert Levine is author of Free Ride: How Digital Parasites Are Destroying the Culture Business and How the Culture Business Can Fight Back.
In the never ending flux of content providers that are enabling their content on GoogleTV, the product lost a major network but signed a movie studio.
Fox blockage via GTVhub
First the bad news: Fox took its content off of GoogleTV today, telling users that "This content is not compatible with your device". Fox was the only major network to leave its content on GoogleTV (GOOG). No more Simpsons or Glee!
There's MORE
Seth Weintraub - Nov 10, 2010 10:37 PM ET
It appears that the networks are letting some content through to GoogleTV users.
Yesterday, GoogleTV users were greeted with messages that ABC, CBS and NBC would not work. This morning however, I had a look around and was able to watch an episode of 30 Rock on NBC as well as a few minutes of Talk (my threshold, not GoogleTV) and Medium on CBS. Disney-owned ABC and Hulu are still blocked, MORE
Seth Weintraub - Oct 22, 2010 9:26 AM ET
When the cable providers and the companies providing the shows fight over fees -- as Cablevision and News Corp currently are -- the viewers lose. But those who enjoy their business bare knuckled definitely win.
Forget the monkey, now it's the (Detroit) Lions' time to weep
As the "Cablevision vs. News Corp." feud escalates, more than three million subscribers remain without Fox programming. Cablevision blames News Corp. for demanding an MORE
JP Mangalindan, Writer-Reporter - Oct 18, 2010 1:26 PM ET
Every day, the Fortune staff spends hours poring over tech stories, posts, and reviews from all over the Web to keep tabs on the companies that matter. We've assembled the weekend's most newsworthy bits below.
Photo: Cablevision
In yet another situation of cable negotiations gone awry, News Corp. yanked Fox programming from Cablevision. "This is an unfortunate attempt to extort unreasonable and unfair fee increases from Cablevision and our customers," stated a MORE
JP Mangalindan, Writer-Reporter - Oct 18, 2010 6:30 AM ET
Rather than a "best of TV" subscription service, Apple will be streaming programs a la carte
[UPDATE: The event is actually scheduled for Sept. 1. See here.]
Fuzzy rumors about Steve Jobs' next move in the TV market have been swirling for the better part of a year, but the picture snapped into focus on Tuesday.
A report by Peter Burrows, a veteran BusinessWeek reporter now writing for Bloomberg Businessweek, lays out the MORE
Philip Elmer-DeWitt - Aug 24, 2010 6:28 PM ETThe video streaming service's new premium model lacks the chops to justify its monthly fees.
As a writer and hopeless Internet addict, I probably spend more time in front of my laptop than I'd like to admit, banging out articles, reading blogs, instant messaging co-workers and friends, and viewing media. Whereas the average American now spends an estimated 34 hours a week in front of the television, it's fair to say MORE
JP Mangalindan, Writer-Reporter - Jul 14, 2010 1:45 PM ET
News Corp. vs Cablevision. Cablevision vs. Disney. The list goes on and on. An updated tally of cable licensing deals gone horribly awry.
As the Cablevision and News Corp. feud continues, more than three million subscribers remain without Fox programming. Cablevision blames News Corp. for demanding an extortionate increase in retransmission fees; News Corp. argues Cablevision isn't negotiating in good faith. Regardless of which party is at fault, the cable MORE
JP Mangalindan, Writer-Reporter - Jun 3, 2010 11:41 AM ET
Fancy driving the A-Team van around San Francisco? There's a Google Map app for that.
Fox and Google teamed up to create a YouTube microsite application to get people excited about the upcoming A-Team movie. According to the (unofficial) Google Maps blog, Planet in Action was contracted along with Google engineers to build the application, which incidentally is quite fun.
Using the 3D renderings of cities like San Francisco and New York you MORE
Seth Weintraub - May 17, 2010 1:44 PM ET
CBS and Disney may join Apple's $30 per month TV service, says the Wall St. Journal
Photo: Apple Inc.
This could be totally disruptive. Or it could be another "hobby" like Apple TV that never quite takes off.
In a front-page story published Tuesday, the Wall Street Journal reported that CBS (CBS) and Disney (DIS) are "considering participating" in Apple's (AAPL) plan to offer television subscriptions over the Internet.
It was the MORE
Philip Elmer-DeWitt - Dec 22, 2009 8:21 AM ETEvery morning, discover the companies, deals and trends in tech that are moving markets and making headlines. SUBSCRIBE
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| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 7.95 | -0.16 | -1.97% |
| Microsoft Corp | 31.27 | -0.17 | -0.54% |
| Ford Motor Co | 12.28 | -0.25 | -2.00% |
| General Electric Co | 19.39 | 0.17 | 0.88% |
| Citigroup Inc | 32.36 | -1.00 | -3.00% |
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,938.67 | -27.02 | -0.21% |
| Nasdaq | 2,933.17 | -15.40 | -0.52% |
| S&P 500 | 1,357.66 | -4.55 | -0.33% |
| Treasuries | 2.00 | -0.04 | -1.96% |
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