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Gathering Clouds

6 Mar, 2015 By: Stephanie Prange

Are gathering clouds raining on studios’ digital sales?

It seems Warner CEO Kevin Tsujihara thinks that might be the case. Different studio-backed cloud-based content ownership services are confusing consumers and slowing digital growth, he said.

Since the introduction of UltraViolet, supported by most major studios, Disney has been a holdout, preferring to support its own subsequently introduced cloud-based service, Disney Movies Anywhere, rather than join the UV accumulation. Various industry observers have debated the merits of Disney’s different path, but many came to the conclusion that both clouds could coexist nicely without damaging digital growth on the horizon.

Tsujihara appears to disagree.

“It would be my goal to bridge [UltraViolet] with what Disney is doing, so the consumer doesn’t have to guess is that a Disney movie, or is that a Fox, Sony, Paramount, Universal or Warner Bros. movie?” Tsujihara said March 4 at the Morgan Stanley Technology, Media & Telecom confab in San Francisco. He noted that while digital sales of movies increased 50% in 2013, growth slowed to 30% in 2014 and is about the same so far this year, which will not be strong enough to offset declining disc sales.

While two cloud services can coexist — indeed they do — it seems to me that they need to be connected through consistent marketing and operational logistics, making access to both seamless to the consumer. Consumers want simple services, and they really don’t care (or often even recall) which studio owned the content they want to acquire. Format options can stimulate, rather than kill, a market. But sometimes, as with the many TV versions of 3D, they scramble the message so much that consumers begin to boycott the market altogether.

“We have to focus on what the consumer is looking for: Simplicity. The magical thing about DVD was it was simple, easy and worked everywhere. I think we have to replicate that in EST,” Tsujihara said.

Making that sort of simplicity work for non-physical ownership is one of the key challenges facing studios, no matter which cloud they follow.


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