It’s been a long time in the making, but the first UltraViolet titles have finally been launched. What do people think about its prospects for success - a revolution in home entertainment and digital delivery, or too little too late? George Cole asks the question.
The 11th of October 2011 could become one of the most significant dates for the home video market, ranking alongside the introduction of the video cassette recorder and the launch of the DVD player in terms of importance. On that day, Warner Bros released Horrible Bosses, the first video title to include UltraViolet functionality, a feature that could transform the way home videos are purchased, stored, distributed and watched.
The organization behind UltraViolet, the Digital Entertainment Content Ecosystem (DECE), is a consortium of more than 70 entertainment, technology and retail companies that includes most of the major Hollywood studios, Sony, Microsoft, Netflix, Best Buy and Tesco Entertainment.
Announced some three years ago, UltraViolet has confounded those who thought the initiative might not get off the ground. This was because there were so many issues to resolve, from developing a common file format (for interoperability) to digital rights management (UltraViolet supports five types), and from re-negotiating release windows to creating an infrastructure that supports the UltraViolet business model.
So what is so special about UltraViolet?
The answer is that, for the first time, consumers purchasing DVDs and Blu-ray discs will be given the option of also obtaining a digital copy that is stored in a ‘digital locker’ in the cloud, and which can be downloaded or streamed to a myriad of devices, including televisions, set-top boxes, DVD players, Blu- ray players, games consoles, tablets and smartphones.
THE NITTY-GRITTY
In July 2011, DECE launched the UltraViolet licensing system for the US market. Mark Teitell, General Manager and Executive Director, DECE, says: “In order to deploy UltraViolet into the consumer market, companies need to be licensees for one or more defined ecosystem role(s), and meet the technical specifications and compliance rules. UltraViolet is open to all companies who comply with these specs and rules. Our license fees structure is flexible and designed to be attractive to companies of all different sizes and structures, including a special feature that reduces entry costs for smaller companies.”
To date, 16 companies have taken out an UltraViolet license, which authorizes them for various roles within the UltraViolet ecosystem, including content provider, retailer, streaming service provider, app/device maker, and download infrastructure/services provider.
“Based on UltraViolet’s technical specifications, licensees can build retail services, apps and devices that interact with the open UltraViolet infrastructure,” adds Teitell. DECE has also started an UltraViolet licensing program in the UK, and expects to announce the first UK licensees in the coming months.
UltraViolet has been launched in the US, with the next territory set to be the UK, followed by Canada, although reports suggest that UltraViolet might not reach the UK until the latter part of 2012.
A number of studios have launched and/or announced UltraViolet titles. First off the blocks was Warner Bros, with two UltraViolet releases, Horrible Bosses and Green Lantern. In November 2011, Warner Bros also released Harry Potter and the Deathly Hallows: Part 2 as an UltraViolet title. Sony Pictures’ first UltraViolet offerings will be Friends with Benefits and The Smurfs. Paramount, Lionsgate and Fox are expected to launch UltraViolet titles in early 2012.
Jim Taylor, Head of Technology and Product Development for UltraViolet, explains how the system works from the consumer’s point of view: “No changes need to be made to the discs themselves. The only thing added is an activation code and a Web URL – users go to the website, enter their activation code, sign up for an account (if they don’t already have one), and get access to the UltraViolet version of the movie. The activation code is typically on a sticker inside the disc package.”
He adds that it’s possible to add PC or BD- Java software to take users to the activation website, and in some cases automatically enter the activation code. It’s also possible to put an UltraViolet digital file on the disc so customers don’t need to download it. These features could be added to future discs. Up to six people per household can register for an UltraViolet account and up to 12 devices can be registered by each account holder. Registration also allows users to transfer the digital content to various media, such as DVDs and memory cards. The result is what the DECE describes as a, “buy once, play anywhere” model, which should prove attractive to consumers.
Mitch Singer, President, DECE and Chief Technology Officer, Sony Pictures Entertainment, thinks that UltraViolet will have wide appeal beyond technology-savvy, younger consumers, “The UltraViolet Household Account extends to all family members,” he says. The UltraViolet launch is a soft one and, in the first phase, the service will focus on streaming services. The second phase will add download services for UltraViolet players and apps, and will be launched when UltraViolet players and apps become available in the market.
“In the short term, UltraViolet will be streaming only, so each streaming service will have specific hardware and software requirements. We expect a variety of solutions covering Windows, MacOS [Apple], iOS [iPhone/iPad], Android, and more specialized devices, such as connected TVs and BD players,” says Taylor. He expects the first UltraViolet branded players to appear in 2012. The UltraViolet player requirements are: internet connection, plus support for H.264 video, AAC audio, (Dolby and DTS audio are optional), and one of the approved DRMs. Users will be able to download files for use with their UltraViolet players and stream files to a variety of UltraViolet-compliant streaming solutions.
“There’s a device specification and a media specification that together define requirements,” says Taylor, “but if you’re talking about a particular type or speed of CPU and other specifications those don’t exist, since there’s such a range of options and combinations. As long as a device passes the compliance verification process then it can use the [UltraViolet] logo.”
SUPPORTERS AND SUCCESSES
At the moment, UltraViolet only supports a purchase model. “UltraViolet does not currently support rental and subscription models. We believe ownership, rental and subscription will all continue to be substantial in the market and are not assuming or asserting that any of these concepts will go away,” says Teitell. “UltraViolet is a major innovation to the ownership value proposition for consumers, and we believe it will have a positive impact on that segment, just as various innovations to the rental/subscription markets have impacted those sectors as well (and just as the DVD innovation impacted the market in the early 2000s).”
This position is supported by the Motion Picture Association of America (MPAA). “Our research has shown that a significant segment of the population will continue to purchase content, especially if the value proposition of ownership takes advantage of what the internet and today’s digital devices can provide, like cross-platform interoperability, while addressing the shortcomings we’ve seen in the earliest stages of the digital market.”
Jim Bottoms, Director and co- founder of Futuresource Consulting says UltraViolet is, “What consumers want – the ability to simply move content from one place to another, and watchitonaTV,in-carorona smartphone.”
Lavina Carey, Director General of the British Video Association (BVA), adds, “We all want UltraViolet to work. Interoperability is what the industry needs because of the convergence that’s taking place. More and more people are using connected devices and they want to move stuff around easily.”
Mitch Singer comments, “Considering the complexities of the development process, we have moved quickly to bring UltraViolet to market. For example, it took more than twice as long for Blu-ray products to come to market, and UltraViolet’s scope is broader. In addition, we had to not only design the business and technical aspects of how this transformation will work, but also help companies adopt and implement this new approach. The breadth and scale of this project has required significant co-ordination and effort by participating members.”
Jim Taylor says that UltraViolet technical development has more or less been completed, it’s all done. “At some point UltraViolet will probably add 3D video support. We’ve talked about adding support for music, ebooks, games, and anything else that gives consumers a better experience with UltraViolet’s open ‘digital library’ model. We’ll look into additional business models of subscriptions, ad-supported viewing, and so on. Many things are possible, but for now, we’re focused on the launch, and I think the consortium has done an excellent job of dealing with a huge number of technical and business challenges to come up with a system that makes buying and watching movies online vastly better than ever before.”
The first UltraViolet titles retail at regular prices, but surely UltraViolet will require a price premium? “We cannot comment on pricing, as it is up to content providers and retailers to determine the retail price for UltraViolet titles,” says Singer. “Prices for our first UltraViolet-enabled titles are not set yet, but we believe UltraViolet provides substantially more value than today’s marketplace offerings. We expect that, in some cases, there will be no price premium for UltraViolet, but rather UltraViolet will be offered as an additional amenity that makes buying and collecting content a more- attractive choice.”
The UltraViolet consortium has a very impressive list of supporters, including almost all of the big six Hollywood studios (Sony, Warner Bros, Fox, Paramount and Universal), but some big names are missing, notably, Apple, Amazon and Disney. All of these companies are developing their own cloud-based services, which could become a rival to UltraViolet. Apple is reported to be talking to studios about adding movies to its iCloud service and Disney has launched a teaser website for a new cloud service, formerly called Keychest, but now known as Disney Studio All Access.
DECE is putting on a brave face. “We are encouraged by the success we’ve had so far in bringing new members on board, and we continue to talk to a variety of companies about their involvement because we are an open, cross-industry consortium, though we cannot divulge specifics, “ says Singer. He adds that just because a company is not a DECE member doesn’t mean they won’t license UltraViolet and deploy the finished product/service to consumers.
DVD and Blu-ray, for example, have far more licensees than they do members in their respective associations. “We anticipate the UltraViolet streaming services will have apps that allow consumers to access their digital collections on iPhone and iPad, just as Flixster does today,” says Singer.
Taylor says that he is aware of UltraViolet products under development for MacOS and iOS. But if UltraViolet apps are developed for the iPad or iPhone, they will need Apple’s approval for use on these devices.
AND THE DRAWBACKS ARE?
“The absence of Apple and Disney is a major issue,” says Bottoms, “We think Disney will come round if UltraViolet is successful. But whether the content community can bring enough pressure to bear on Apple is questionable – Apple own that space in the mobile market. Tablet computing is all about Apple and it’s ironic that the iPad lends itself to this type of content. You can’t rule out alternative action by Apple.”
Tom Adams, Director and Principal Analyst, US media at IHS Screen Digest, notes that Apple’s co- founder, the late Steve Jobs, once said that he was only interested in interoperability when Apple had zero percentage market share in a particular market. “There’s no doubt that DECE would love Apple to license an UltraViolet app,” says Adams, adding that UltraViolet has been developed to halt a decline in physical disc sales, which were worth $14 billion in the US market in 2005, but are now down to around $10 billion.
Bottoms points out that UltraViolet’s payment model is unclear – for example, who hosts and streams the digital copy, and who pays for the service? “If I purchase my UltraViolet title from Tesco, will the retailer be responsible for streaming the content to me? Will retailers want to be involved?”
Taylor says, “Retailers and their DSPs (download service providers) are responsible for storing downloadable content. Streaming service providers are responsible for storing and streaming content. CDNs [Content Delivery Networks] are typically used for all of this.” Taylor explains that streaming service providers need to get both a license and files from each content provider and convert the file into whatever streaming formats the service uses. When an UltraViolet user goes to a streaming service, the service provider shows the titles that are available for streaming in their UltraViolet library.
Adams believes there are a number of potential candidates for operating UltraViolet’s cloud- based service, including Netflix (a DECE member), cable operators (Comcast is a DECE member), retailers (Walmart owns the Vudu movie streaming service, while Tesco has an 80% stake in the movie streaming service Blinkbox) or the studios (Warner owns streaming service Flixster and is using it to deliver its cloud-based UltraViolet content).
But Bottoms warns: “When the studios launched BD-Live, they didn’t anticipate that you would have to refresh the content if you wanted people to revisit your site. It’s not a one-off cost but an ongoing commitment.”
Users are restricted to three simultaneous streams, but there isn’t a set time frame for how long content is stored in a user’s digital locker – rumours have suggested that it could be as short as 12 months, although Warner Bros has set a three-year period for storing content for free. Digital locker providers are also free to set their own payment mechanisms. Concern has also been raised about the impact of UltraViolet on release windows and in particular the pay-TV market. HBO has agreed to drop its window with Warner Bros, whereby pay-movies shown on HBO are not available for rental or purchase online, but at the time of writing, it was unclear whether this clearance will also apply to other studios.
There are also questions on how UltraViolet interacts with legacy hardware and discs. Jim Taylor says, “There are several ways UltraViolet content can be delivered to legacy devices: existing streaming services can add UltraViolet support; new software can be delivered to open platforms like PCs and smartphones and new firmware can be delivered to closed platforms like, Blu-ray players.”
When it comes to legacy discs, Singer says, “Similar to some of the promotions with Blu-ray Disc titles that enable consumers to ‘trade up’ from DVD, we anticipate that studios will offer consumers the ability to upgrade currently owned discs or digital files to their UltraViolet digital library. The ultimate decision, though, is up to individual content providers/retailers to offer consumers this type of upgrade.”
Jeffrey Bewkes, Chairman and Chief Executive of Time Warner, has said that: “If you want to take your old DVDs into retailers and have them put them into the cloud and therefore be available for you to move from device to device, you’d be able to do that.” Taylor says that a disc could be treated as a proof of purchase and extended to UltraViolet. “The important thing for the studios is preventing less-than-scrupulous discs or borrowing discs and pretending that they own them. So they may require you to take your discs to a retailer who will permanently mark them to indicate that they've been copied to an UltraViolet account.”
But Bottoms is sceptical: “I can’t imagine a retailer being too happy if I turn up with a trolley-full of old discs (many of them purchased from elsewhere) and then ask the retailer to put them on the cloud for me.”
The BVA’s Carey says that if UltraViolet is to succeed, there needs to be widespread availability of fast broadband and that is certainly not the case in the UK. “And when fast broadband is universally available, the industry will need legislation to prevent unfair competition from illegal download sites,” she adds.
Bottoms adds that education will be key to UltraViolet’s success. “Consumer awareness is critical. Even now, 70% of UK consumers don’t know that Blu-ray players also play DVDs. The problem with UltraViolet is that many different companies are involved and that makes it harder to put across a coherent message.” Many in the home video industry will be hoping that UltraViolet overcomes these challenges, and that like the arrival of DVD, it re-energizes the video market.
