Disc Bridges Digital Divide

28 Aug, 2008 By: Erik Gruenwedel

Family Guy Presents: Blue Harvest was the first DVD to include digital copy.

In the drive toward electronic distribution, leave it to old school packaged media to lend a helping — or perhaps more accurately, competing — hand.

Studios are not so quietly ramping up efforts to include a digital copy with new and catalog titles on DVD and Blu-ray Disc. The electronic edition typically downloads to a PC or Mac and can be transferred to a laptop or portable media player, including an iPod, iPhone and Sony’s PlayStation Portable (PSP), depending on digital rights management (DRM) restrictions.

Piggybacking digital copy with DVD and Blu-ray allows studios to continue mining the lucrative packaged media market while establishing a foothold in electronic distribution and countering piracy.

To underscore the legitimacy of digital copy and provide consumers with a unified theme, DEG: The Digital Entertainment Group Aug. 28 unveiled an industrywide logo that will be included on DVD and Blu-ray releases in the fourth quarter.

“We believe this logo will allow consumers to easily identify which products on DVD and Blu-ray Disc have the added value of a digital copy,” said Ron Sanders, president of DEG and of Warner Home Video.

Industry experts say digital copy currently provides no direct incremental revenue to the studios, and instead is seen as an extended bonus feature designed to bolster a title’s re-release and create viewing options for new releases.

“Digital copy is viewed more as an indirect financial benefit to the studios that might be expected to draw the type of fans that like to re-play a movie across multiple platforms,” said Douglas Dixon, consultant with Manifest Technology. “It’s also an attempt by the studios to reduce piracy by offering a free, legitimate alternative that’s still wrapped with DRM to prevent further copying.”

Rob Enderle, analyst with Enderle Group in San Jose, Calif., said digital copy could impact movie download sites by implying a value-add to packaged media in the consumer’s mind.

“It will change the dynamic a bit, but it doesn’t address the primary value of downloads, which is video-on-demand. You don’t have to get in the car to buy it.”

Enderle said the studios should have bowed digital copy sooner as a legitimate countermeasure against piracy.

“Now, the studios have a much better argument against piracy in the courts,” he said. “And it’s better business.”

20th Century Fox Home Entertainment jump-started digital copy in January with the release of the first digital copy on the animated “Family Guy” “Star Wars” parody DVD Family Guy Presents: Blue Harvest.

Fox continues to outpace all studios with digital copy and Sept. 23 will re-release 20 catalog titles on DVD ($19.98 each) with digital versions, including Napoleon Dynamite, Office Space, The Girl Next Door, Grandma’s Boy, There’s Something About Mary, Dodgeball, Super Troopers, Behind Enemy Lines, The Day After Tomorrow, Die Hard, Fantastic Four, Hide & Seek, I Robot, Independence Day, Speed, The Transporter, X-Men, X2: X-Men United, X3: The Last Stand, and Reno 911: Miami, More Busted Than Ever (unrated edition).

The studio’s previous digital copy releases on home video include Alien vs. Predator: Requiem (Blu-ray), Alien vs. Predator: Requiem — Special Edition (unrated DVD), Hitman: Digital Copy Special Edition (unrated DVD), Jumper: Two-Disc Special Edition (DVD), Jumper (Blu-ray), Juno: Two-Disc Special Edition (DVD), Juno (Blu-ray), Live Free or Die Hard: Two-Disc (unrated DVD with Windows Media-compatible digital copy), Street Kings: Two-Disc Special Edition (DVD), Street Kings (Blu-ray), What Happens in Vegas: Two-Disc Special Edition (DVD) and What Happens in Vegas (Blu-ray).

“Our research shows that when given the option, consumers recognize the value proposition that digital copy provides as a simple, fast way to move content to a portable device,” said Mary Daily, EVP, North America marketing, TCFHE.

But Fox isn’t the only studio on the digital copy bandwagon.

Sony Pictures Home Entertainment Nov. 25 releases Hancock, the studio’s tentpole summer theatrical hit, on DVD with a digital copy and, in a first for the studio, on Blu-ray with a digital copy.

Sony’s digital copy, which is not compatible with Mac or iPod, is included with previous DVD releases Hero Wanted, Diamond Dogs, The Cottage, Cleaner, The Tattooist, Vantage Point: Special Edition, Impact Point, Insanitarium, Starship Troopers 3: Marauder, 21, The Art of War II, Made of Honor and You Don’t Mess With The Zohan, in addition other catalog fare.

Rich Marty, VP of new business development for the studio, said consumer response to previous Sony digital copy releases prompted additional titles in the fourth quarter.

“We’re seeing accelerated redemptions as the feature is becoming more familiar to the consumer,” Marty said. “As more titles come out, it will be seen as a real consumer benefit to packaged media.”

He said digital copy demonstrates the flexibility of packaged media and how it can adapt to consumer trends.

“It’s another great feature to reinvigorate the packaged media business,” Marty said.

Universal Studios Home entertainment released American Gangster (HD DVD), The Mummy: Deluxe Edition and The Mummy Returns: Deluxe Edition with digital copy. The studio plans to include an electronic file with future new and catalog DVD and Blu-ray releases such as Forgetting Sarah Marshall, The Incredible Hulk, Hellboy II: The Golden Army, Wanted and The Mummy: Tomb of the Dragon Emperor, among others, according to spokesperson Lea Porteneuve.

Anchor Bay Entertainment Oct. 28 releases Dead Space: Downfall on DVD ($26.97), the distributor’s first Blu-ray ($34.98) title featuring digital copy.

Walt Disney Home Entertainment Aug. 26 re-released Tim Burton’s The Nightmare Before Christmas: Collector’s Edition on DVD ($32.99) and Blu-ray ($39.99) — the studio’s first title with digital copy, which it calls “Disneyfile.”

Future releases with digital copy include DVD and Blu-ray editions of Wall-E Nov. 18 and The Chronicles of Narnia: Prince Caspian Dec. 2.

Lionsgate released Rambo, The Eye, Tyler Perry’s Meet the Browns and The Bank Job with digital editions in both DVD and Blu-ray; on Sept. 8 it will do the same with Forbidden Kingdom.

Curt Marvis, president of digital media at the mini-major, said the consumer doesn’t see a rigid demarcation line between packaged media and digital. He said digital copy offers consumers versatility while supporting retailers and the home entertainment business.

Warner Home Video last year offered so-called “e-copies” versions of Superman Returns, Blood Diamond, 300 and Ocean’s Thirteen with the standard DVD, which required submitting a coupon and an additional charge for the Web-based download.

This year, the studio offered digital copies with special edition multiple disc DVD releases of Harry Potter and the Order of the Phoenix and I Am Legend with Will Smith.

Other titles included Harold & Kumar: Escape from Guantanamo Bay on DVD (with coupon) and Blu-ray, Lost Boys: The Tribe on DVD and Blu-ray and 10,000 B.C. on Blu-ray.

Future releases with digital copy include Speed Racer Sept. 16 on DVD and Blu-ray, Sex and the City special edition DVD and Blu-ray, Run Fat Boy Run (both Sept. 23) on Blu-ray, and Fred Clause (Nov. 25) on DVD and Blu-ray.