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Disney Exec: We Are Committed To Electronic Sellthrough Business

16 May, 2007 By: Erik Gruenwedel

LONG BEACH, Calif. — The Walt Disney Co. continues to diversify digital distribution of its content while acknowledging it “won't pay the bills” in the next five years, said an executive.

Benn Carr, VP of new technology at Walt Disney Studios and keynote speaker last week at the Media-Tech Expo, said the media giant was cognizant of a slowdown in DVD sales and eyes electronic sellthrough as a means to create new complimentary partnerships in addition to incremental revenue.

Carr said the key to digital distribution centered on increased penetration of high-speed Internet access in U.S. homes, including cable, satellite and mobile platforms.

“Broadband is everything to electronic sellthrough,” Carr said.

However, Carr said electronic dissemination of Disney content did not rate as a revenue source in the company's five-year plan.

As a result, Disney continues to explore ‘managed copy distribution,' which will allow a consumer to place a blank Blu-ray Disc into a managed copy-enabled device and legitimately copy a Blu-ray movie into an electronic file that could be transferred to portable devices, media centers and home networks.

The movie files also could be stored, managed, registered electronically on a PC and converted to on-demand DVD replication.

“One of the benefits of registering files is that we can provide lots of value-added consumers to our electronic channels,” Carr said.

The VP said managed-copy proposals by Disney and other studios continue to be reviewed by the Advanced Access Content System License Administrator (AACS LA), including final DRM specifications and licensing terms.

“Our goal is not for consumers to buy one and get many,” Carr said. “We want to make sure usage rules accommodate the consumer and accommodate our business.”

He said Disney also was not seeking to replace DVD anytime soon. Carr said Disney approached electronic sellthrough as a proactive business decision in order to be prepared from a production, operational and distribution standpoint.

“We have to test the marketplace to find out where the strengths and weaknesses are from the quality of service to technology, business models and on consumer preferences,” Carr said. “We are committed to electronic sellthrough and experimenting with these technologies … because we believe that's what consumers want. And we believe they will co-exist in the future.”

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