Thomas K. Arnold is considered one of the leading home entertainment journalists in the country. He is publisher and editorial director of Home Media Magazine, the home entertainment industry’s weekly trade publication. He also is home entertainment editor for The Hollywood Reporter and frequently writes about home entertainment and theatrical for USA Today. He has talked about home entertainment issues on CNN’s “Showbiz Tonight,” “Entertainment Tonight,” Starz, The Hollywood Reporter and the G4 network’s “Attack of the Show,” where he has been a frequent guest. Arnold also is the executive producer of The Home Entertainment Summit, a key annual gathering of studio executives and other industry leaders, and has given speeches and presentations at a variety of other events, including Home Media Expo and the Entertainment Supply Chain Academy.
I still feel a bit of residual stress every time July rolls around. That’s because for so many years of my life, each July meant a trip – generally, but not always, to Las Vegas – for the Video Software Dealers Association’s annual convention and trade show.
My first VSDA show was in 1989, back when the studios still poured heaps of money into the annual show in a bid to woo the thousands of independent video rental dealers who generated the lion’s share of revenue. Back then, the annual show drew upwards of 12,000 retailers to Las Vegas and was marked by lavish exhibits on the show floor and even more extravagant parties. My first VSDA party, in fact, was held on a football field and sponsored by Paramount; there were food booths, each with a different ethnic theme, and so much free liquor I don’t remember how I got back to my hotel room that night.
I had just begun freelancing for what was then Video Store Magazine, one of four trade publications in the market at the time. We had a huge staff whose sole purpose in life was to put out a monthly print magazine – and, of course, get in as much face time as we could with studio executives as well as retailers at the home video industry’s big annual event. We sponsored a dance party attended by thousands of retailers; we moderated panel discussions on such hot trends and topics of the day as lower pricing for ‘B’ titles, the rise of the erotic thriller and the battle between the two leading national chains, Erol’s and that aggressive little comer from Dallas, Blockbuster.
Over the years, as the business changed, the show changed with it. Consolidation among rental dealers, and the studios’ growing desire to deal directly only with the emerging national chains, began to cast a pall onto the show by the middle 1990s, heightened by a flattening of video rental spending by consumers to whom the novelty of renting movies was wearing off. The parties grew smaller and less elaborate; A-list stars like Michael Douglas and Steve Martin gave way to aging Hollywood “legends” and TV has-beens.
The launch of DVD breathed new life, new excitement, into the show, but attendance continued to decline as retail power was further consolidated into a handful of dominant sellthrough players, including Walmart, Best Buy, Costco and Target. The spacious Las Vegas Convention Center was abandoned in favor of the smaller Sands as the confab adapted a “suites” model that gave studios a pass from the expensive show floor booths of the past; the focus shifted from stars and parties to more business-like networking functions and expanded lineups of workshops and seminars.
But the magic was clearly gone, and everyone knew it. The show limped on until the plug was mercifully pulled after the 2008 affair, which by then had moved to an off-strip location where one of the highlights was a meet-and-greet with a quartet of aging TV Western stars.
Yes, I miss it. Sure, it was a big expense, and a rude interruption to my summer. But it was also a very useful event, the one chance each year I had to connect, on a personal level, with the key players on the supply, distribution and retail fronts, not to mention all sorts of journalists and analysts, all in one place, all at one time.
The convention historically took place a week or two after the Fourth of July holiday. This year, I think I’ll celebrate by going to my town’s one remaining video rental store and seeing if they have Ishtar.
Oh, those were the days….
Ah, that wonderful old expression, “There’s no such thing as a free lunch.” It’s true as ever, as consumers of entertainment well know. Watch free TV and commercials; if you don’t want the ads, buy a disc or watch a movie on premium VOD. Either way, you pay — in the first case, with your time; in the second, with your money.
Even YouTube, that great leveler, has been bitten by the ad bug. The number of clips with opening ads has risen significantly in just the past year, and it’s not just for professional content. I just finished watching a car crash video — don’t ask — and it was preceded by an ad for the movie Savages.
I don’t mind this one bit. As a lifelong journalist, I realize — perhaps better than most — the costs involved in creating content, be it a story, a movie, a piece of music, a work of art. And, frankly, I don’t mind paying for it, one way or the other. I don’t watch much network TV, preferring to watch series like “The Sopranos,” “Deadwood,” ”The Shield” and, now, “Jericho” on disc, with a clearer picture, better sound and no commercial interruptions. And when I do watch TV — or listen to the radio, or watch YouTube videos, for that matter — I no longer tune out (or, in the case of YouTube, hit the “skip” button) the commercials, as I used to do. If there’s a price to pay, so be it. It’s only fair.
The “free lunch” concept is hitting a fever pitch right now, as the major television networks square off in court over Dish Network’s Hopper DVR, which has a feature that allows users to instantly skip commercials for primetime shows. CBS, Fox and NBC are each suing Dish, arguing that skipping commercials violates their copyright. Of course the real reason is financial: They fear a significant loss in advertising revenues if people start skipping commercials en masse.
After all, media advertising is all about the eyeballs.
Dish, in turn, is now suing the four major networks, asking a judge to find that its DVR technology is perfectly legal.
The latest developments: The Hollywood Reporter has reported that sources say ABC is talking to major law firms about filing a suit.
And DirecTV has announced that it has been sitting on ad-skipping technology for about five years, but hasn’t yet seen any need to implement it.
I have a hunch the networks will prevail on this one. They make a very valid point, arguing, in essence, that sitting through commercials is the price viewers pay for free, broadcast TV. And while you can’t stop someone from hitting the bathroom during a primetime commercial break, stopping an enabling technology like Dish’s AdHop is a very real possibility, much like the courts more than a decade ago in ruling against music file-swapping.
This isn’t quite the same as having to fast-forward through the ads as on a regular DVR, where viewers still see the promos as they zip by on the screen. AdHop doesn’t let the viewer see anything, which runs contrary to why the ad is there in the first place.
If it hurts the content creator and the copyright holder, it’s not going to fly. There’s no such thing as a free lunch, especially it means you may starve someone else.
For the life of me, I cannot fathom how a responsible a media outlet like The Financial Times would commit one of the most serious blunders imaginable in the world of watchdog journalism: Take two random data points, connect the dots and draw a half-baked conclusion.
But that’s just what the august FT has done, with an article that essentially asserts a slowdown in electronic sellthrough means the imminent death of UltraViolet.
That makes about as much sense as saying that New York Mayor Michael Bloomberg’s proposal to ban super-size sodas in New York City means sales of French fries at California McDonald’s are in trouble.
The FT cites a report from IHS Screen Digest, a media research firm, that revenues from subscription rental services such as Netflix are increasing, while sales of feature films on Apple’s iTunes — which by some estimates controls upwards of 90% of digital movie sales — have slowed.
“With consumers turning away from buying films online in favor of renting them digitally, the outlook is bleak for UltraViolet, a new industrywide, cloud-based locker system that Hollywood hopes will stimulate purchases of film content,” the FT asserts, quoting Dan Cryan, author of the IHS Screen Digest report, as saying, “When consumers go digital, they go to rental. There’s just no interest in owning anything.”
Uh, no, Dan. Analyzing trends we’ve seen materialize throughout the last couple of years clearly indicates that consumers want their movies two ways: To simply watch, they stream — it’s easy, convenient and cheap. But to own, they still want something tangible, something they can hold, look at and file away — like Blu-ray Disc and DVD.
The two markets are co-existing quite nicely, and the latest numbers compiled by DEG: The Digital Entertainment Group on behalf of the studios even indicate the slowdown in disc sales has been arrested.
What’s happening is nothing more ominous than market segmentation, much like the book industry years ago splitting into the paperback and hardback camps — or, more recently, gamers splitting into console and computer factions.
Cryan is correct in saying that when consumers go digital, they go to rental. In the music industry, digital downloading worked because it’s cheap and easy — you can buy single songs for 99 cents, the same price for which we used to buy vinyl singles back in the pre-CD era. The entire downloading business, in fact, was birthed by a blindsided and arrogant music industry that first took away consumers’ sampling mechanism, the single, and then jacked up the price of CDs to more than $20. Consumers didn’t want to spend $20 for an entire album on which they might only like one or two songs, so they rebelled and began swapping song files over the Internet.
The movie business is different. We don’t buy movies like we buy music. In music, the lure is individual songs; in movies, you don’t buy individual scenes you happen to like. You buy the whole enchilada. And when you’re buying an entire two-hour movie rather than a couple of three-minute songs, you’re not going to want to buy something fleeting and ethereal that could very well disappear with your next computer crash — particularly when you’re paying 10 times as much as you would for a single song.
UltraViolet is simply a way to extend and expand your purchase of a physical disc by giving you access to that content on a wide range of mobile and other devices. You’re not replacing a physical product with a digital one; you are enhancing it.
It’s silly, therefore, to say that because people aren’t buying digital copies of movies, UltraViolet is a flop. You still need a disc to tap into the promise of UltraViolet, at least at this point. And last I checked, the studios were still selling an awful lot of discs.
Our job in the media is to carefully and thoughtfully analyze and interpret the news.
Invariably, that means pouring water on the flames of hysteria and debunking any “sky is falling” notion some may harbor — not perpetuate it.
Walt Disney Co. CEO Bob Iger is absolutely correct when he blasted Dish Network’s new Auto Hop commercial-skipping DVR. Advertising is, indeed, critical for great TV shows — or any TV shows, for that matter — to exist. And if we keep finding ways to circumvent commercials, eventually we'll come to the point where the number of eyeballs they attract is so insignificant that advertisers will say, "Why bother?"
There was a point in time when technology was not yet so advanced that everything was in balance. If you wanted to watch TV shows for free, you were at the mercy of the networks (for new shows) and the syndicators (for the old shows). If you wanted to avoid commercials and enjoy your favorite shows with no interruptions, you turned to home video. For a lower price you could rent your show; for a higher price, you could buy a copy. Either way you were no longer a slave to a schedule or a sales pitch, but either way there was a cost attached to this freedom, this perk.
Music file-sharing first brought the concept of free entertainment to the masses, and we were hooked. Morals, ethics and the belief that there is no such thing as a free lunch went out the door. We loved the music but didn't care beans about the musicians or record companies that brought us this music. In effect, we bit the hand that fed us — and we've kept biting and biting ever since. Each new technological marvel — DVRs, streaming, YouTube — brought us another hand, and another opportunity to draw blood.
I blame this something-for-nothing mentality for the slowdown in disc sales. It's not just that consumers keep getting more and more entertainment options; it's that consumers keep getting handed more and more opportunities to access entertainment for free —some of it legal, some of it not.
And while content owners used to have to contend primarily with third-world pirates, now the enemy to the chain of commerce is everywhere, including Silicon Valley.
I applaud Bob Iger's resolve, and even the specter of litigation that is being raised by other fearful content-side executives. But the whole thing is beginning to resemble a game of "Whack-a-Mole" — no sooner do you squash one threat when up pops another one.
What we really need is a collective conscience, an old-fashioned pang of guilt. I've made it a point to no longer switch radio stations during a commercial break or skip the front-loaded ads on YouTube videos.
But I fear I am something of a lone voice. All of us need to collar that destructive dog that lurks within so many of us and train it to not bite — no matter how many tasty hands come before us.
If we don't, eventually we're going to wind up with an empty hand.
I find it most disconcerting that Microsoft will no longer support DVD playback on its next incarnation of operating software, Windows 8.
The House of Gates came under fire recently when it acknowledged the move. Microsoft initially said the move was based on changing consumer habits. As Home Media Magazine noted, “In a May 3 corporate blog post, Microsoft said ‘telemetry data’ and user research suggest consumers primarily consume video on the PC and related mobile devices from streaming sources such as YouTube, Netflix, Amazon and Hulu. … The software giant also cited recent data from IHS that claimed consumption of movies online in the United States will surpass physical video in 2012.”
Microsoft later came back with another argument: in essence, that including DVD playback would be unfair to buyers of ultrabooks and tablets because of royalty costs associated with decoder technology — costs that would be passed on to consumers even if their devices don’t have optical disc drives.
Only the pricier Windows 8 Pro will offer DVD playback, according to Microsoft.
Either Microsoft is simply trying to save a buck, or else drive consumers to buy the more-expensive Windows Pro.
Either way, it’s a disturbing development — and one that feeds right into those who are of the mindset that the physical disc is an antiquated technology and everything is headed into the cloud.
I stand firm in my belief that there will always be a market for a physical product. Some of us like to watch movies on our computers, and welcome the ease and convenience of simply sticking a disc into our laptops — a disc we’ve already paid for, a movie we already own.
And what about home movies we’ve burned to DVD, or slide shows of family photos?
I’ve been waiting patiently for Microsoft to support Blu-ray Disc. I kept waiting for an announcement — and now, this. Microsoft has gone in the opposite direction.
I was an avid Mac user until the early days of the Internet, when some sites couldn’t be accessed on Apple products. That drove me right into PC Land.
Now, I’m thinking about going back to Mac.
Writing on ZDNet, Adrian Kingsley-Hughes sums up my sentiments exactly. “I feel that Microsoft is making a big mistake here,” he writes. “While Apple has a streamlined one-size-fits-all OS X edition that contains everything users need, Microsoft is once again juggling features in order to make the higher-priced edition of Windows more superior and desirable than the cheaper option, while at the same time giving OEMs yet more reason to install third-party crapware onto new systems.”
I tend to agree with a recent blog posting by NPD Group analyst Stephen Baker that maintains Best Buy, despite it's recent troubles, isn't headed for the scrap heap just yet.
Sure, the consumer electronics chain's big-box stores have become something of a showroom for price-sensitive web shoppers. They visit a Best Buy store to get a close-up, hands-on look at the merchandise, and then head home to place their order from an online merchant with better prices and no sales tax. Maybe they even place their order on the spot from their smartphone, while they're still inside the Best Buy store.
Ouch. But as Baker points out, this isn't a unique challenge in the CE space. It's happening across the broad spectrum of retailing, from furniture stores to clothing boutiques. The same goes for other forces that are putting a dent in brick-and-mortar spending, from the still-troubled economy and sky-high unemployment to high gas prices, which are leading to a decline in car trips.
What Best Buy has working in its favor is a recognizable brand, reputation for quality and, quite, quite frankly, the fact it is the last major CE chain standing.
If you think about it, there are always pairs of brand leaders: Home Depot and Lowe's, Staples and Office Depot, CVS and Rite-Aid, Walmart and Kmart. In strong economies, both thrive; when things are bleak one invariably emerges as the victor. Walmart already pretty much has vanquished Kmart, and if our economic malaise continues much larger I would expect the other weaker-of-the-two links (Office Depot and Rite-Aid, especially) to stumble and perhaps fall/fail, as well.
As for Best Buy, it's already won, having triumphed over the weaker link in the CE world, Circuit City, right around a decade ago. Do I agree with recent decisions Best Buy has made, like redesigning stores to mimic Apple and Verizon storefronts, turning over software management to a third party (Anderson Merchandisers) and placing discs in the back of the store, where the chance of an impulse buy goes way down? Not at all.
But I'm not at all ready to write off Best Buy just yet. First of all, as Baker correctly notes, the situation at Best Buy isn't nearly as dire as it's been made out to be in the mainstream press. The stores are still moving an awful lot of merchandise, at healthy margins.
Moreover, many of the problems the chain is facing can be easily dealt with — including a marketing campaign in which low online prices are met and matched, and an overhaul of store layouts by some smart merchandising consultants with years of experience in the retail trade. Heck, hire Baker, hire some smart studio marketer like Mary Daily or Lexine Wong or Jeanne Hobson - get someone in there who knows consumers and their habits and listen and learn from them.
But act quickly. The clock is ticking — and the worst thing Best Buy can do at this point is stand by and do nothing.
Walmart’s big disc-to-digital conversion program, which launches April 16 in more than 3,500 stores, could be the answer to packaged media’s sales slump.
The giant retailer is breathing new life into consumers’ tired old DVD collections, offering to unlock a digital version on a remote server that can be accessed at any time on a wide selection of devices, from computers to tablets and even smartphones.
That’s simplifying the process, of course, but quite honestly that’s how it needs to be presented to Walmart customers, who truly represent mainstream America. Concepts like “cloud” and “digital storage locker” are beyond most Americans; we in the business have a jaded sense of what people should comprehend simply because we’re immersed in it, day in and day out.
My plumber, my gardener — heck, even my 10th grader’s history teacher, my realtor, my doctor and my lawyer — don’t want technical specs, jargon or complicated explanations of how things work.
They want to know what they can do, and the simple fact of Walmart’s initiative is exactly as I described it above: Hand the clerk your disc, fork over $2 for a regular transfer or $5 for a super-clear high-def upgrade, and before you know it you can watch whatever’s on that disc wherever and whenever you like, on whatever electronic gadget you happen to be fooling around with at the moment.
As the great journalism instructor Jacques Barzun once said, the key to getting a point across is to be “simple and direct.” And if anyone can master the art of simplicity and directness, it’s the associates at Walmart, since they’ve been dealing with mainstream consumers — as opposed to highbrow Hollywood types — for years.
Studio executives would be wise to follow Walmart’s lead when they start ramping up marketing for the other side of the UltraViolet equation, new Blu-ray Discs that are enabled with the technology, off the shelf.
Make matters as simple and uncomplicated as humanly possible. Make it easy to understand, and easy to execute.
This is a big, big chance Hollywood has to get the disc business rolling again, pun intended. Let’s not blow it by focusing too much on the message and making sure we’re saying the right thing. In the end, the right thing isn’t always necessarily the smart thing.
It’s sad for me to hear Best Buy is in trouble. The consumer electronics chain, which played a key role in getting DVD off the ground back in the late 1990s, has seen a significant decline in same-store sales and says it will close 50 big-box stores this year. The culprit, the chain says, is that more and more customers are using its stores as a showroom to check out new products and then buying them, for less, online.
Not me. For the past decade, every computer, every iPad, every iPod, every printer, every printer ink cartridge and every TV I’ve purchased has been bought at Best Buy. I figure I spent upwards of $10,000 on electronic gadgets from Best Buy throughout the past decade, and nothing I’ve bought there ever disappointed me.
One reason I keep going back to Best Buy is the prices are competitive. The other is that I liked the look of the stores.
I have my own ideas as to why Best Buy is floundering, and they’re not the same ones CEO Brian Dunn cited in an analysts call.
For starters, I don’t like the new store layouts the chain has been rolling out. The old footprint was inviting and friendly; the new look appears cluttered and too focused on products like the iPad and mobile phones that, quite frankly, I can get elsewhere.
Putting entertainment software – Blu-ray Discs, DVDs and CDs – in the back also wasn’t a smart move. A big chunk of the packaged media business comes from impulse buys, which is why Target, for example, is now selling discs at endcaps near the checkout lanes.
Best Buy has a great assortment of packaged media, but you wouldn’t know it. It’s tucked all the way in the back. Out of sight, out of mind. Furthermore, as I understand it, the department has been outsourced, so the personal care and attention given to product choice, merchandising and display under the Joe Pagano/Gary Arnold eras is conspicuously absent.
Walmart’s embrace of UltraViolet underscores the mass merchant’s commitment to packaged media, which it always has recognized as a traffic driver. I can’t fathom why Best Buy isn’t taking the same approach. When packaged media sales started declining, Walmart did something about it. Best Buy’s tactic appears to be moving discs into the back, as though they’re being punished for something.
Customer service also has suffered. Don’t get me wrong – Best Buy associates still are helpful and generally well-mannered. The problem is, you can never find one – and there’s not much cross-departmental training so that if, for example, you approach the computer clerk with a question about TVs, he won’t be of much use. Associates should be trained about the entire product mix, and then rotated from time to time so that they can learn more about every product line Best Buy carries, instead of being stuck in one department.
I say this in the best spirit of constructive criticism. I’m a loyal Best Buy shopper, and I want to do what I can to make sure it stays afloat.
It’s almost a foregone conclusion that with the release this fall of Secret of the Wings, the next film in the enormously successful Disney Fairies series, Walt Disney Studios will have another popular video premiere title on its hands — and one that will again top the sales charts, like every predecessor in the franchise. With Secret of the Wings, however, Disney breaks through with another industry first: the first-ever home video premiere on Blu-ray 3D.
“We’re excited that this all-new feature-length CG-animated adventure with Tinker Bell and her fairy friends is the first direct-to-video title being released on Blu-ray 3D,” said Lori MacPherson, EVP of product management for Walt Disney Studios.
The three prior installments in the series, which was launched in 2008 with Tinker Bell, all have been huge hits, selling millions of copies on both DVD and Blu-ray Disc. The line is based on the Tinker Bell character, created by J.M. Barrie. Tinker Bell made her Disney debut in the 1953 animated classic Peter Pan, albeit with neither wand nor voice. Since then, Tinker Bell has become one of Disney’s most important branding icons, appearing as a “hostess” in much of Disney’s live-action programming, beginning with 1954’s “Disneyland” and continuing with “Walt Disney’s Wonderful World of Color” and other shows. She is also featured in the opening of all Disney films, flying over the Castle, and Disney gave her a voice with the release of the 2008 film. In 2010, Tinker Bell even got her own star on Hollywood Boulevard’s celebrated Walk of Fame.
Disney’s tradition of high-profile voice casting in its DTV titles continues with Secret of the Wings, which features the voices of Academy Award-winner Anjelica Huston, Timothy Dalton and, as the new fairy Periwinkle, Lucy Hale. Returning cast members include Mae Whitman, Lucy Liu, Megan Hilty, Raven-Symoné and others. The film is directed by Peggy Holmes, co-directed by Bobs Gannaway, produced by DisneyToon Studios and executive produced by John Lasseter.
Disney has had huge successes out of building franchises around animated classics and then issuing a series of sequels, years later, that are made expressly for the home-viewing market. The practice began in the middle 1990s with Aladdin and not only established Disney in the home entertainment franchise business, but also jumpstarted the nascent sellthrough business even before the advent of DVD thrust the gates to consumer movie ownership wide open. Long before the first DVD ever appeared in stores, consumers were already building extensive collections of Disney films on videocassette, many of them based on theatrical releases they themselves had watched as kids — and were now introducing to their own children.
“Secret of the Wings joins our consistent and successful line of Disney-branded direct-to-video titles and furthers our commitment to bringing high-quality storytelling to families wherever they enjoy them,” MacPherson said.
The Disney brand certainly helped, but Disney’s success in building franchises goes a lot deeper than mere brand awareness. To sustain a franchise, the quality needs to be top-notch, and observers note that the films in the Disney Fairies line — 2008’s Tinker Bell, 2009’s Tinker Bell and the Lost Treasure, 2010’s Tinker Bell and the Great Fairy Rescue and last year’s Pixie Hollow Games special on The Disney Channel — all have been marked by strong, compelling stories.
Jeanne Hobson, SVP of retail strategy and solutions for Disney Consumer Products, notes, “Secret of the Wings is a great addition to the Disney library and continues our rich heritage of storytelling for the whole family. The movie and the many Disney Fairy-related products create terrific cross-merchandising opportunities for a variety of retail channels and within the company.”
Walt Disney launched the Disney Fairies franchise in 2005 and has since scored successes with more than 1,400 different Disney Fairies and Tinker Bell books published in 33 languages. Visitors from around the world to DisneyFairies.com have created more than 40.5 million Fairies, and the characters also have been integrated into such Disney stalwarts as the theme parks and Ice Shows.
“The Disney Fairies franchise is a phenomenon among our many product lines and businesses in 57 countries worldwide,” Hobson said.
In the new film, Tinker Bell and her fairy friends journey into the forbidden world of the mysterious Winter Woods, where curiosity and adventure lead to an amazing discovery and reveal a magical secret that could change their world forever. Secret of the Wings comes out on Oct. 23, 2012, and will be available in a variety of combo packs including a four-disc package with 2D and 3D Blu-ray versions plus digital copy and two-disc Blu-ray/DVD packages in English and Spanish. A single-disc DVD version also will be available.
Today’s announcement by Walmart that it will participate in the UltraViolet project marks a turning point in the way a new entertainment product or technology is traditionally launched.
Generally the Hollywood-CE partnership takes aim at the early adopters, hoping to wow the tech heads and then ride their wave of enthusiasm into the mainstream where it either catches on like wildfire (DVD) or slowly builds over a period of years until it becomes the new standard (Blu-ray Disc).
With UltraViolet, the studios and their partners are taking an unprecedented approach: They are going directly to the masses, hoping to win over middle America right away. And they couldn’t have picked a better partner than Walmart, the country’s top DVD and Blu-ray Disc seller (40% market share) and biggest retailer, period, with more than 3,800 U.S. stores that each week are visited by about 100 million customers, representing nearly one-third of the country’s total population.
But having Walmart on board so early in the game isn’t just a marketing win. It’s a strategic win, a tremendous vote of confidence that underscores my belief that with UltraViolet, Hollywood truly has built a better mousetrap in which the big winner is the consumer.
Too often, I think, we lose sight of consumers, who want to pay as little as possible for as much as possible and, at the same time, are looking for the easiest, simplest way to get what they want. Walmart has always put the consumer first, studying consumer trends and habits and then reacting, as it did with $4 prescriptions. We all know how big a success that was, and with UltraViolet Walmart is gearing up for an encore. Forget all the naysayers who keep harping on home entertainment as being a business in decline. Walmart obviously sees bringing digital functionality to physical discs as a winning combination, both for our business and, more importantly, for the consumer.
I have to agree. UltraViolet began as a way to turn a Blu-ray Disc into the be-all and end-all of home entertainment. Consumers buy a movie once and then send a copy into their very own digital locker up in the cloud, where they can access it anytime they want, on any device they want, in perpetuity.
A brilliant concept — in my book it’s one of the smartest things our industry has ever done.
The only thing better — I remember thinking back when UltraViolet was launched — would be to provide consumers with a way to do the same thing with their existing disc collections. And that’s precisely what Walmart is bringing into the game.
The first phase of the transfer process will be limited to retail, but that makes sense. This is a revolutionary concept, and consumers will need a little hand-holding. Phase two will involve online transfers, something that’s already on the way courtesy of specially equipped Blu-ray Disc players from Samsung.
The transfer fees for disc-to-digital conversion are reasonable, and I think both segments of the UltraViolet business model — buying Blu-ray Discs with cloud storage included in the purchase price, and sending discs you already own into the cloud — will feed off each other.
Wearing my consumer hat, I’m thrilled. And once I explain the concept to my friends, most of them are equally enthusiastic, especially the ones who have accidentally mailed a Redbox disc to Netflix or downloaded a movie from iTunes only to lose it when their computer crashed.
UltraViolet promises to be one of our industry’s true transformational moments. And with Walmart onboard, the potential impact is huge. It’s all about keeping the customer satisfied.