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1 Million UltraViolet Copies Redeemed

22 Feb, 2012 By: Erik Gruenwedel

Consumers purchasing new release movies with UltraViolet have redeemed digital rights to more than 1 million copies in the cloud-based digital storage platform, according to a new report from IHS (formerly Screen Digest).

UltraViolet is the studio initiative aimed at jumpstarting physical and electronic sellthrough of movies and related content in a market increasingly consumed by rental transactions, including subscription video-on-demand.

Specifically, UV is a digital rights authentication system designed to allow a digital copy of a film or television show bought from any vendor — physical or electronic — to be played on any one of 12 devices owned by up to six members of a household, either via download or streaming from the cloud. The UV ecosystem is designed to allow users to view the content they have purchased — on disc or online — on a growing number of Internet-connected devices, including UV-enabled BD players, TVs and media tablets.

El Segundo, Calif.-based research firm IHS attributed the tally to 50,000 UltraViolet accounts being opened since the Consumer Electronics Show in Las Vegas. Coupled with the 750,000 UV accounts disclosed by Digital Entertainment Content Ecosystem consortium, which founded UltraViolet, IHS estimates that 800,000 accounts have been created in the United States since the launch of UV titles by Warner Home Video last October.

Each UV account has accessed digital rights to 1.25 titles, bringing the total number of digital copies stored in the cloud to 1 million, according to the report.

While critics of UV say the rollout has been hampered by technical limitations and confusion, studios are facing a reality that the consumers rent digitally three times as much as they buy movies digitally in the United States. Indeed, in 2011, the number of digital rentals approached 63 million units, compared with 19.1 million digital purchases, according to IHS.

Consumers spend more per movie watched when purchasing a film than when renting one — with as much as 80% of the consumer spending going to the studio top-line revenue, according to IHS. By comparison, retailers and distributors keep the majority of rental and subscription spending.

“One million [UV titles] may not sound like much compared to the 504 million movie discs sold in 2011,” said Tom Adams, principal analyst and director of U.S. media for IHS. “However, we have projected that only 19 million digital film files were sold during the entire year of 2011 by electronic sellthrough (EST) vendors like iTunes, Xbox Live and Vudu. This suggests that if UV can continue to gain momentum this year, it could encourage consumers to buy more movies.”

Adams said recent key UV benchmarks include Flixster.com (owned by Warner) announcing that its UV-enabled movie application will be available on Panasonic’s Viera Connect devices, including HDTVs and Blu-ray Disc players, later this year. Samsung said it would release BD players later this year that give consumers the option to put a copy of previously purchased non-UV-enabled BD and DVD programs into their UV collection for a nominal fee to be set by participating studios.

Amazon announced it signed a deal with an unnamed studio to offer electronic sellthrough of UV-enabled movies later this year. Paramount became the first studio to offer EST access to titles in late January, including the “Mission: Impossible,” “Godfather” and “Beverly Hills Cop” movies, plus the most recent “Star Trek.”

Finally, Neustar, the database-management company that developed and operates the digital-rights clearing house underlying UV, showed off its Catalyst white-label UV storefront, which enables retailers to more easily provide UV streaming and downloading services.

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