UltraViolet May Be Best Strategy for Movie Studios and All Digital Distributors Says Entertainment Industry Strategist David L. White

Top Quote David L. White, former Miramax executive and a leading strategic consultant for the home entertainment and other industries, recently stated that the UltraViolet system could create a bright future for movie studios and other companies in the video content distribution channel. End Quote
    QuoteThe UltraViolet model may prove to be the right approach for all the players involved, but the development and rollout of the system has been slow.Quote
  • (1888PressRelease) August 16, 2012 - Los Angeles - The Digital Entertainment Content Ecosystem (DECE) developed the UltraViolet digital rights library system. It is a coalition of 75 companies, including movie studios, consumer electronics (CE) manufacturers, big box retailers and technology and video service providers. The consortium was founded in response to the growing number of consumers moving from physical DVD/Blu-ray disc libraries to digital access and cloud storage of video content.

    "The UltraViolet model may prove to be the right approach for all the players involved, but the development and rollout of the system has been slow," said White. "As of January 2012, there was still no CE manufacturers, retailers or download and streaming providers that had announced specific plans to integrate with UltraViolet."

    White continued, "During March 2012, however, Wal-Mart, one of the UltraViolet members, initiated the system in its store via its Vudu service. The consumer pays a $2 to $5 fee to acquire streaming rights to their old DVD content. The challenge, however, during this early stage of UltraViolet, is that only approximately 300 devices are able to access Vudu, and none of them is an Android device. There are other limitations that are stalling the launch of UltraViolet by Best Buy, Blockbuster and other coalition members, which may jeopardize the service being in place for the 2012 holiday season."

    According to press reports, the major studios are heavily promoting UltraViolet among the other members of the consortium. The studios view the system as a means to slow the rapidly decreasing sales of physical media, such as DVD and Blu-ray discs, since consumers will be allowed to make a digital copy of a disc's content.

    Consumers, however, have been reluctant to buy digital downloads, primarily because they were concerned about the amount of hard drive space that would be needed and the difficulties in accessing and sharing content on various devices as well as integrating libraries.

    According to a story in Variety's online edition, Amazon (a member of the coalition) may offer consumers a program to copy a DVD or Blu-ray disc they own, and store it online for 99 cents. The story also quotes DECE president Mitch Singer (and CTO of Sony Pictures) that the big box retailers will have to be the primary educators of the public about the value of UltraViolet.

    White added that no one should rush to judge UltraViolet during what some are calling its "beta-testing" phase. He said the major studios and all UltraViolet members must realize that they are trying to create this system, and launch it, at the same time the consumer market is converting from early adopters to a giant wave of "average" technology users who will want UltraViolet, ultimately.

    Research from various sources supports the notion that manufacturers are building the devices and consumers are buying them, which will drive consumers' willingness to pay for the UltraViolet service.

    According to Nielsen's fourth quarter 2011 Cross-Platform Report, 67 percent of game consoles in U.S. households were connected to the Internet. A game console or over-the-top streaming device was how more than half of Netflix members watched content on their TV.

    Nielsen also found that viewing video content on smartphones has increased 35.7 percent, Q4 2011 vs. Q4 2010. (Smartphones account for half of all U.S. mobile phones.)

    Smartphones are forecasted to increase from 115.8 million, for 2012, to 192.4 million, for 2016, and more than one in three U.S. Internet users will have a tablet by 2014, reported eMarketer.

    NPD Display Search, a market research company, revealed that the sales of Internet-connected TVs in North America will increase from 9 million for 2011 to 24.7 million by 2014.

    "I was a member of the executive team that Mike Lang, (former) Miramax CEO, assembled to monetize the Miramax film library that Filmyard Holdings purchased from Disney during December 2010," said White. "Our success in negotiating new distribution deals in physical and digital channels with Lionsgate Entertainment, Echo Bridge Entertainment, Netflix, HULU and others is directly attributable to our understanding of consumer preferences and technological advances in digital distribution."

    "Of all the UltraViolet consortium members, movie studios are probably the first that want the system to be launched and operating as soon as possible. The CE manufacturers will sell the devices steadily and the retailers are diversified and are still selling plenty of DVDs and Blu-rays, but movie studios must push more product through the various channels. It's a bottom-line issue today. Too many channels are stagnating and DVD and Blu-ray discs are headed for oblivion like CDs. The sooner the studios develop a broad strategy, such as we did at Miramax, the more of them that will still be in business when the transition from physical media to digital content is complete."

    About David L. White and Centric Industries, Inc.:
    During a professional career of more than 20 years, David L. White has become a highly versatile (and sought-after) consumer products strategist. After many years with Belkin International, Actuant, Rainbird and The Flecto Co., he founded Centric Industries, Inc. during 2009. It has developed value-added partnerships with a number of retailers, manufacturers and investment firms. This value is primarily derived from the development of consumer products and placement, but also includes strategic development for its partners.