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Warner CEO Wants to Meld UltraViolet With Disney Movies Anywhere

4 Mar, 2015 By: Erik Gruenwedel

Kevin Tsujihara cites consumer confusion with competing cloud-based platforms in hampering digital movie sales

Warner Bros. would like to offer a seamless path for consumers buying digital and physical movies stored in the industry’s competing cloud-based platforms: UltraViolet and Disney Movies Anywhere, CEO Kevin Tsujihara told an investor group.

With 21 million registered accounts, UltraViolet is the industry-backed platform enabling consumers to access digital files of movies bought electronically or on disc. Disney remains the lone studio holdout, preferring to partner Disney Movies Anywhere with Google Play, iTunes and related apps and cloud-based storage — none of which are linked to UltraViolet.

Disney Movies Anywhere last November did partner with Walmart’s Vudu.com, which is an UltraViolet platform. Consumers have access to about 400 Disney, Pixar and Marvel titles — content that remains separate from UltraViolet.

Speaking March 4 at the Morgan Stanley Technology, Media & Telecom confab in San Francisco, Tsujihara said the fact Disney movies are digitally separate from the rest of the industry is problematic to consumers and the growth of electronic sellthrough.

The CEO, who formerly headed Warner Bros. Home Entertainment, said that while digital sales of movies increased 50% in 2013, growth slowed to 30% in 2014. Year-to-date, digital sales remain up about 30% — a growth trajectory Tsujihara said is not fast enough to offset declining disc sales.

“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?” he said.

Tsujihara said Disney and other studios could maintain separate sellthrough platforms while combining cloud-based functionality on the backend. The executive said combining user data between UltraViolet and Disney would help the industry grow digital content sales.

The amalgamation of platforms underscores Warner’s strategy of upping focus on digital distribution of content in home entertainment as a means of growing margins. Tsujihara contends digital sales don’t have to surpass physical. Even at a 50/50 split, digital’s higher margins would more than offset physical while impacting the bottom line.

“To be more profitable, we don’t need [consumer spending on home video] to grow,” he said.

While iTunes controls 60% and 40% of Warner’s digital sales and transactional VOD business, respectively, Comcast’s successful launch in late 2013 of a digital sales platform underscored the importance offering consumers an easy-to-use storefront. 

“People will still buy movies,” Tsujihara said.

At the same time, he said home entertainment has to do a better job marketing the concept of content ownership to consumers through easier user-interfaces and interoperability.

“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.


About the Author: Erik Gruenwedel

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