As with the introduction of any major new technology, the UltraViolet and Disc-to-Digital services are creating significant consumer enthusiasm and also contending with some confusion about how it works and what it offers. Michael Koehn gets an update from the industry and the consumers on awareness and understanding of UV.
I’m at a Walmart in Los Angeles talking with Lindsay Thompson, who has just converted several titles in her DVD library into digital versions through the store’s Disc-to Digital UltraViolet service. UltraViolet, the multi-faceted content delivery system created by Digital Entertainment Content Ecosystem LLC (DECE), is still in its infancy, the curtain having just gone up at Walmart stores – the first national UltraViolet retailer – on April 16. Although still in the process of a slow rollout as part of its startup mode, we thought it might be informative to find out how the service is perceived among consumers, who, in the final analysis, will be the ones who decide to put down their money to use it and ultimately determine how successful this innovative new concept will be. Thompson is a sales representative for a medical device company and spends more than 50% of her time on the road. As a film enthusiast and a person almost continually on the move, she always has at least one screen with her in the form of her smart phone, a tablet, and, when more situated, her laptop. The Walmart disc-to-digital service, with its UltraViolet interoperability, is a convenient way for her to order her key DVD titles to go.
“This seems perfect for me, since I have a list of core films that I always come back to when nothing else interests me, like Titanic, Harry Potter, the Lord of the Ring series and classics like Casablanca,” Thompson says. “And now I have those viewing experiences collected in a virtual library and can watch them when travelling or when holed up in a hotel room with nothing else to do. And I can always add new titles to my virtual library whenever I want and access them anywhere. At $2 a copy to get my own DVDs converted, it’s at the very least a good way to back up my collection.”
While Lindsey Thompson had no trouble deciding that UltraViolet was a service that would cover many of her viewing needs, acceptance by consumers at large has been a little more mixed. As UltraViolet introduces itself to the US public through major national retailers across the country, along with the retailing might of Walmart, movie studios are hoping they’re finally in the process of providing a multi-faceted viewing service that will capture the imagination of movie enthusiasts everywhere.
Jason Kramer, Managing Director at Vital Findings, a consumer research company located in Culver City, CA, has worked with all the major film studios and is helping several top studios by providing the consumer feedback on UltraViolet that they hope will ensure its success. While his work with the studios is proprietary, he does have a personal overview of why UltraViolet may succeed where earlier attempts at content delivery have failed.
“The studios have been looking for ways to extend the consumer viewing experience from the physical format of DVD to a digital format,” Kramer says. “There have been attempts along the way, including ideas like Digital Copy, and digital downloads have been around for a while, but none of these technologies are perceived as being comprehensive enough to get mainstream consumers interested in digital movies. UltraViolet offers the content of most major film studios, and delivers entertainment across a wide variety of viewing devices.”
Digital downloads continue to grow in popularity, and there’s plenty of streaming services around, with the omnipresent Netflix, Walmart’s VUDU and Hulu offering popular content delivery services. However, UltraViolet is unique in its ability to offer both download and streaming options, and the way it works with Walmart in-store disc-to-digital service to allow both the digitization of a user’s current library and also giving them the flexibility to watch their DVD/Blu-ray collections across a broad platform of internet-connected devices, including television, laptops, tablets, smartphones and gaming consoles.
“Consumers like the idea of digital copies of films, because it gives them portability and the convenience of not having to take their DVDs with them during travel,” Kramer says, “but Digital Copy was never able to reach the mass market. The studios have now extended the product benefits to include streaming, which helps reach the fast growing market for tablets, and are working toward making digital content easier to access on a TV, one of the keys to mass market adoption.”
The organization that came together to create a more comprehensive standard, the DECE, is a consortium of major Hollywood studios, consumer electronics manufacturers and retailers, network hardware vendors, systems integrators and DRM vendors. Organized in 2008, DECE was tasked with addressing this vast market potential and developing a set of standards for the digital distribution of premium Hollywood content.
“What DECE saw was that a lot of the digital options weren’t compatible, and they all had to offer different versions of their content – an iTunes version, a Windows-based Media Player version – to get their product played,” Kramer explains. “Also, iTunes, Amazon and VUDU, the top movie downloading programs, all use different file formats. So DECE decided to come up with a single new industry standard that would offer maximum flexibility and content delivery across a broad range of devices and, ultimately, connected TV.”
If that was the goal, and DECE has succeeded in getting everyone on board with this ‘digital locker’ (with the exception of Disney, who is developing its own system called Keychest), then it would seem like a natural win-win for the studios and consumers. But there have been perception challenges for DECE from the moment Warner Bros launched the first UltraViolet title, Green Lantern, in October 2011. What was a no-brainer for movie enthusiasts like Lindsey Thompson has turned out to be more of a consumer conundrum, at least in the early stages, than the organization had hoped.
“I think that much of what UltraViolet offers still has to be made clear to the end user,” Kramer comments. “The long-term vision for the ecosystem UV could create is falling into place, but that case still has to be made to consumers. Keep in mind, though, that UltraViolet is still very much in its infancy, and there are still some rights and technical issues to overcome.”
Mark Teitell, the General Manager of DECE, explains that the goal was to develop an ecosystem that would offer a widely-honoured standard that could be shared by a majority of entertainment companies, delivery systems and viewing devices: “Our first job was to build an industry base and then support that group with a measured rollout that was getting everything right. Now, in addition to the UltraViolet offered with new-release Blu-ray Discs and DVDs, UltraViolet-enabled disc-to-digital conversion and digital purchase is available to consumers through Walmart and VUDU.
Consumer awareness is still in the beginning stages with UltraViolet, and the largest awareness of our audience will be within the environment they shop for video. In retail environments, for example, they’ll see stickers on the packaging promoting the UltraViolet streaming and download service that comes with the disc. We’re rolling this out slowly at a pace that is fully consistent with our expectations, and this is about building something slowly and getting it right. We’re happy to note that after we gained our first million subscriptions from October 2011 to February 2012 we added the second million customers in the shorter period from February to April of this year. So the awareness is picking up and growth is accelerating.”
Other recently-launched initiatives will also contribute to widespread consumer awareness. National Walmart TV ads mentioning UltraViolet showed up on national morning shows and primetime TV began appearing in mid-April, and there has been much activity online debating the merits and possible deficiencies of the system across a UV blogosphere that ranges from hard core movie fans to technology mavens to conspiracy theorists.
“In our consumer analysis, in focus groups and surveys, we’ve found that there three things that people love about UltraViolet,” says Teitell. “The first thing they like is the freedom and flexibility of what they can do with the content they own across any array of high technology devices. The second thing is that they have confidence in the standardization and interoperability of the digital formats. Consumers don’t want to be locked into a single format or company, and here they get both streaming and download rights for content delivered to any device from internet-connected TV to tablets, Xboxes and smartphones. It covers all the bases. And the third thing that people like is the concept of ownership, of having the actual bits and bytes of a file on a device. That seems more like true ownership, instead of having remote access to a film or TV program that they can never really have.”
As with any new paradigm, critics have popped up to inveigh against what some see as a cumbersome and unnecessary new service. “No matter how innovative the new technology, the critics are always more outspoken and louder than those who actually see the potential offered by the product,” says Kramer.
Because of the number of parties involved in the service, the layers of involvement and an authorization process that seems more intrusive than necessary have run into consumer flack. One of the points of contention: the UltraViolet rights statement itself is legally ambiguous. The word “may” gets used a lot, possible later added fees are mentioned often and the agreement includes this legal escape clause: "The functionality and rights for downloads that are described here are planned, but not guaranteed, and are subject to change."
A consumer I talked to who was interested in UltraViolet and got frustrated by the sign-up procedures told me that the whole process seemed intrusive and prone to misuse. “Before anyone signs up I recommend they take a good look through the numerous end user licence agreements they need to agree to for UltraViolet, VUDU, Flixster and each of the film studios who are plugged into this. You provide them with not only your internet access, e-mail and credit card information, but also connect them with all your social networking contacts, info on your mobile carrier and device type and data previously collected on your hard drive and devices. This information can be distributed to hundreds of silent organizations and partners. You’re giving them license to extract everything about you as a potential marketing target. And you can be assured that if you have a superhero title in your UltraViolet collection you will be advised of every similar new title released by the movie studios in the future.”
Leveraging that sort of data isn’t unique to VUDU or UltraViolet, of course, but what is perceived as being cumbersome to new customers is the number of accounts consumers are tied to when signing up. A sales clerk at Walmart told me he had a spirited conversation with a customer who got frustrated with the sign-up process. “After he created a VUDU account and selected The Girl with the Dragon Tattoo with its UltraViolet code, could he enter it in the VUDU website and start watching? No, he had to go to Sony Pictures’ website and create another account, then link that account to his VUDU account, so that the film would stream. Then there were problems with invalid passwords, but we got him straightened out. It’s not a real seamless process yet, so that’s something we’ll have to live with for now.”
That’s also a market strength and something absolutely unique to UltraViolet – its relationship with the customer at the retail level. Aligning itself with the world’s largest retailer and other high profile chains has really been a key factor in rolling the service out. Those frontline Walmart retail clerks have heard many of the reasons that the service is attracting customers, and have been able to help those who were misinformed or curious but confused.
But that’s provided that the VUDU assistant you need is there to help. On a busy Sunday afternoon, at Walmart in Los Angeles, with a promotional flyer in hand advertising the service, I was told that the person who handled their disc-to-digital service wasn’t there that day, and that they worked only during the weekdays. And that experience isn’t unique. There are posts in consumer forums relating similar stories about having to go to half a dozen Walmart stores, with nobody seeming to know when the VUDU disc-to-digital ‘specialist’ would be in.
Consumers may also be jaded by the idea of yet another technology model offering to fulfill their entertainment needs and what may be perceived as a cash grab by the studios. This online debate was sparked by questions about the advantages of signing up with UltraViolet:
Customer 1: “While I'm glad the VUDU streaming quality has improved, this service is still a dud to me. It just seems like another way for me to be targeted for marketing. And there's no way I'm going to pay extra for a digital copy of a movie I already own.” [Technically, UltraViolet as service doesn’t stream. The streaming originates from a service provider such as Flixster or VUDU, based on recognizing an UltraViolet title in a consumer’s collection.]
Customer 2: “You already bought the disc. For $2 extra they're setting up massive data centers and streaming it to you for no additional cost. That isn't free, and I'm surprised they made it as cheap as they did. I think this service is awesome, and if I want my old collection in the ‘cloud’ then I can pay to upgrade the ones I want the most. And any future purchases will include UltraViolet, so there is no upgrade cost. If you still like having the discs in your collection then buy the Blu-ray releases with UltraViolet included. Win/win if you ask me.”
Other random consumer responses from visits to Walmart stores throughout southern California and posts in consumer forums online, accurate or otherwise:
- “Put a film in the cloud like this for $2 and it'll theoretically be there for you long after your kids are grown and you’re retired. That's not a feature you got when you originally bought the DVD/Blu-ray Discs. I like to think of this as the digital equivalent of buying an extended lifetime warranty.
- “I just can't see driving to Walmart, walking a quarter mile across the parking lot and standing in line at a kiosk to get digital media for my device. That's too much old-school style shopping inconvenience for digital media.”
- “As for the convenience, considering that Walmart is the world's biggest retailer, most people go there once in a while anyway. The only inconvenience is remembering to bring the DVDs with you when you’re there to shop.”
- “I'm going to laugh the first time someone takes in their family collection of DVDs and Walmart loses them, and the only thing that appears on that guys’ VUDU is a couple of episodes of Dora the Explorer.”
- “This is great for parents who have kids who watch the same movie over and over. I have a 5-year old and can keep him happy because I can play his movie on a residential or portable device wherever we are and have it available whenever he wants to watch it. And I don’t have to worry about the disc getting scratched or smeared with peanut butter. Magic.”
- “No one but the Hollywood studios like the implementation. When you upload your movies to UltraViolet, they are no longer yours. You merely have the privilege to access them for however long they decide to keep the content and license servers running. And what do you have if this goes away? Nothing.”
Other media distribution models that were promoted heavily at various times and are now gone include MSN Music, the Yahoo! Music Store and Walmart Online Music. But what they didn’t have that UltraViolet offers is that each of those defunct services was exclusive to a single company, and UltraViolet has been adopted by a consensus of Hollywood’s major movie studios in an effort to create a unified standard. There’s a lot of backbone behind this and the service is built to be around for the long haul.
“There has been a huge commitment to UltraViolet, its success so far has defied skeptics, and ideally every studio will participate with every major retailer in establishing this new paradigm for entertainment distribution,” says Kramer. “But when you have fragmentation, as seen from the consumer’s point of view, that can be frustrating and has to be resolved. UltraViolet, as it works through the implementation process, is attempting to create a seamless ecosystem that works in favour of all consumers. And awareness is building with the public, but it’s a little more involved proposition than they are used to seeing. Getting the message to consumers is very important so that they understand the full dimension of what is being offered now and what the long-term vision is for the UV ecosystem.”
“A lot of powerful things can happen when a person’s entertainment collection isn’t just a lot of physical discs sitting on a shelf,” says Teitell. “We intend to keep building consumer awareness for UltraViolet through national TV, print advertising and Facebook campaigns, and we see the UK catching up in 2012 with the level of maturity that the US has. We’ll also see an announcement about an UltraViolet rollout in Canada coming soon. Unlike some consumer purchases, where they opt in on a first generation rollout and then wonder if they should have waited until they got the bugs out, that won’t be the case when they buy content with UltraViolet rights and privileges, which will automatically get more useful for them as the service expands – there will be more UltraViolet rights and privileges available as the service matures. With UltraViolet, what they already have will only get more useful in the future.”
The widespread acceptance of the new UltraViolet entertainment distribution model depends on it being easy to use and highly reliable. It also needs to be perceived as having staying power by consumers who have become cynical about investing in content delivery services with limited lifespans. And ultimately the service needs to respond to consumers’ requirements for flexible and fair digital rights and the freedom of enjoying their entertainment wherever and whenever. In concept UltraViolet, with its considerable assets, is prepared to deliver on all of these promises, and the next year or two of implementation should reveal just how well this service coincides with consumers’ expectations.