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Kaleidescape Signs Lionsgate for Digital Store

1 Oct, 2013 By: Erik Gruenwedel

Mini-major joins Warner Bros. offering new releases and catalog movies and TV shows on digital sellthrough platform with UltraViolet

Kaleidescape Oct. 1 said it signed Lionsgate to a multiyear content license agreement enabling owners of its packaged-media disc system sellthrough access to more than 2,000 movies and TV shows, including “The Hunger Games” and “Twilight” franchises, as well as catalog titles like Apocalypse Now

Sunnyvale, Calif.-based Kaleidescape said its digital store is the first online platform that enables consumers to download movies and TV series with video and audio quality equal to Blu-ray Disc — many with UltraViolet functionality.

The storefront, which requires purchase of a Kaleidescape system starting at $4,000, features access to Lionsgate movies and TV shows in 1080p resolution with Dolby TrueHD and DTS-HD Master Audio.

Movies include “The Hunger Games” and “Twilight” franchises, “Mad Men,” Tyler Perry films, and children’s programming such as “Angelina Ballerina”, “Bob the Builder,” “Thomas & Friends” and “Barney,” among others.

Movies and entire TV show season digital retail prices range from $6.99 to $9.99, respectively.

The Kaleidescape user interface features high-resolution cover art and a brief synopsis of each title. The on-screen interface highlights similar films based on genre, director, actors and more. Viewers can easily skip through previews, menus and ads to instantly start the feature film.

“We’re pleased to partner with emerging digital platforms like Kaleidescape that are helping to drive increasing demand for content worldwide,” Thomas Hughes, SVP of digital media with Lionsgate, said in a statement. “By delivering thousands of commercially exciting, critically acclaimed motion picture and television titles to a growing spectrum of digital and traditional buyers, we’re able to expand and enrich the home entertainment experience to meet the evolving needs of our consumers.”   

Digital Sales Upend Rental Projections

Kaleidescape’s studio expansion coupled with Target’s bow of a digital content store, suggest mass consumer migration toward predominant rental business models such as Redbox and Netflix, and away from sellthrough, may be premature, say some analysts.

The better-than-expected retail and sellthrough during the first half of 2013 is being driven by Blu-ray spending  (up 15%) and electronic sellthrough (up 50%).  While EST is only 12% of total sellthrough spend, it is growing far faster than expected, according to BTIG Research analyst Richard Greenfield.

He said digital sellthrough has been helped by shorter windows (where EST is the only way you can access the product), lower EST retail price points and improved accessibility (more storefronts promoting EST with UltraViolet support).

“Without a notable fall-off in holiday/Q4 retail spending, our full-year prediction of rental spend outpacing retail could prove incorrect,” Greenfield wrote in a Sept. 27 post. “While consumers are clearly shifting their home entertainment spending toward digital and away from physical media, interest in ownership is not fading as fast as expected. We will ultimately end up in a media access world, but windowing and pricing is clearly sustaining ownership.”

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