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Miramax CEO on UltraViolet: ‘We Have No Choice’

4 Oct, 2011 By: Erik Gruenwedel

Mike Lang says the cloud-based digital locker is Hollywood’s last stand to preserve sellthrough in home entertainment

Failure to attract consumers’ interest in the cloud-based digital locker could spell doom for the home entertainment industry and movie production going forward, said Miramax CEO Mike Lang.

In a Q&A session (ironically with sellthrough opponent Ted Sarandos, CCO of Netflix) at MIPCOM in Cannes, France, Lang said consumer access to digital content has been confusing, with studios pushing sellthrough and rental, despite the fact that the separate business models compete with one another.

Studios such as Warner Home Video and Sony Pictures Home Entertainment, among others, this fall are rolling out initial home entertainment sellthrough titles (on disc and electronically) capable of being stored virtually in the UltraViolet cloud-based digital locker and playable on myriad compatible devices.

“As an industry, we really have to believe it,” Lang said. “We really don’t have choice. If the home entertainment business as we know today, in terms of the transaction business, goes away, that’s not good for anyone in this room.”

Lang said failure to reinvigorate the sellthrough model could adversely affect studios’ ability to finance movies going forward. Sales of DVD/Blu-ray Disc/electronic sellthrough movies have historically affected whether a title was profitable or not. The CEO said he has found the digital transaction model to be poorly executed.

“It’s very difficult for the consumer to know that when they buy something that it works on any device,” Lang said. “It’s either tied into an Apple ecosystem or best of luck trying to make it work.”

He said the ease of streaming on myriad devices such as a Blu-ray player and video game console is what has made Netflix so popular.

“Clearly, if we can create a digital locker experience that is as easy for the consumer and interoperable, then at least [it would be] an opportunity,” Lang said.

He said there needs to be discussion among studios regarding pricing of packaged media, including the fact that DVD prices currently are too high at retail, especially for library product. Lang also said studios should not advocate the transactional VOD rental model.

“If you really want that film, you should buy it and not rent,” he said. “It doesn’t make any sense to rent it for 24 hours.”

The CEO said Miramax is working through the issues — issues he said that are complicated and difficult.

“I don’t know how many people use photo sharing software, but that is 90% cloud-based,” Lang said. “Ninety-five percent of the software industry in the world is now through cloud-based transactions. I’m hopeful that the movie business gets there.”

He said studios need to partner with technology companies and retailers to see what they think will work and then develop a cohesive plan going forward.

“Hopefully that will create a purchase-transaction market,” Lang said.

About the Author: Erik Gruenwedel

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