Courtesy of a superb story from The Wrap’s Brent Lang, we get a fascinating look at the possible future of the ever-changing home entertainment world. Hollywood’s biggest problem right now is that consumers are moving away from purchasing DVDs and towards dollar rentals at their local Redbox, even cheaper rentals at Netflix (if you use it as often as I do), and the crack-cocaine of convenience known as Netflix Streaming. Last year DVD sales collapsed 44% and wholesale revenues plummeted to just $4.5 billion from nearly $8 billion. In worse news, Bluray is looking like the new laserdisc — a nice format for hardcore fanatics but not something that’s going to catch completely on with the mainstream.
Studios are losing money like crazy due to this new non-purchasing trend and the hope behind Ultraviolet is that it will put customers back in the frame of mind of owning their home video. Essentially, this new technology will allow you to watch whatever you purchase on your television, PC and mobile device. This convenience appears to be the Big Pitch. I’m not sure it’s enough.
The home entertainment market has been shrinking at dizzying speed, but Hollywood thinks that it may have finally found a way to stop the trend before irrevocable harm.
The answer, studios believe, is in the cloud.
In coming months, most major studios will launch UltraViolet, a system designed to let consumers stream and store movies and TV shows they purchase on multiple devices. It’s the next step beyond Apple and Amazon’s digital cloud services, which allow users to access music and eBooks on multiple devices. …
Reinvigorating the sell-through model is critically important because studios make roughly $15 on every movie they sell versus a few dollars on each one they rent. The studios expected Blu-ray to do that but the phenomenal success of Netflix and Redbox, both of which have made streaming or renting movies easier than ever, has cut into the sell-through business.
So that’s the problem and proposed solution in a nutshell. If it is what I think it is, here’s why I see Ultraviolet going nowehere::
To sweeten UltraViolet’s appeal, studios are examining the possibility of allowing users to add movies they have previously purchased to their digital rights locker for some additional fee. …
“We’ve increased the friction on digital sell-through by locking it to a specific device,” Mitch Singer, DECE president and chief technology officer of Sony Pictures Entertainment, told TheWrap. “This reverses the friction by allowing members to play movies and shows across any device. Right now users aren’t collecting movies as much as we’d like them to collect them.”
A few things….
1. A major problem the studios (and much of the entertainment media) seem unable to grasp is that — on top of piracy, streaming and dollar rentals, there’s another factor involved in the collapse of sales: Movies just aren’t very good anymore. How many movies do you walk out of nowadays wanting to see again? While we’re seeing a new Golden Age on television, the last ten years have been a slow creative death for the film business. Hollywood’s simply not creating the kind of product audiences want to proudly display on a shelf and relive again and again.
2. How expensive will an Ultraviolet disc be? Because of Redbox and Netflix Streaming we are becoming behaviorally modified as consumers to watch what we want when we want for an entire month that costs us less than the price of a single DVD. Furthermore, with the drop in creative quality, we’re simply not energized to run to Walmart and spend $17.99 for “The Green Hornet” when we can rent it for a buck or wait out the 28 day moratorium until Netflix has it. If Hollywood wants more impulse purchases they had better create a impulse-worthy product. So if studios plan on making $15 a pop with Ultraviolet, that’s an awfully pricey purchase price and unlikely to change consumer habits.
3. If the Big Pitch with Ultraviolet is that we can watch our purchased DVDs on computers and mobile devices, my question is … can’t we do that now? At least when it comes to the PC, you can watch your DVDs and Netflix Streaming. So what’s the big advantage here?
One potential plus of Ultraviolet is the idea of allowing consumers to load their older DVDs into their system. I’m moving myself across the country Thursday and am more than a little freaked that I could lose my entire film collection due to theft or an accident. All of my music is backed up on iTunes and a separate hard drive, however. I was even able to scan our family photo albums and back those up on multiple hard drives. But my obnoxiously large film collection is disc-only and having a back up would offer some real peace of mind.
Of course, this all depends on what the Ultraviolet “fee” will be. If the creators of this technology were smart, they would offer this service free for a time in order to get consumers invested in the technology. iTunes doesn’t charge to load your old CDs into their system and this likely is why they are now the Coca Cola of the digital music world. I realize iTunes and Ultraviolet are not the same in this regard. With iTunes the consumer stores their own music and with Ultraviolet they would store it for you, but you have to spend money to make money and this kind of service is what many of us have been waiting for.
Essentially, what I see with Ultraviolet is Hollywood grasping for the perfect at the expense of the good. Like a middle-aged former football hero, the studios want to find some miracle that will allow them to relive the glory days of the home video boom, and I just don’t think that’s going to happen. The genie is out of the bottle. The only thing I love more than movies is owning movies I love. And If they’ve lost me….
Studios need to embrace streaming and try to own as much of that market as possible. That’s the future. It may not be as glorious as the past, but there’s money to be made there.
Then they need to try and make better films.
Please read all of Brent Lang’s article. It’s well worth your time.
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