What a day for UltraViolet articles. I understand that the group is planning a flurry of press releases based on some announcements that it is ready to launch, and the media is beginning to smell something isn’t quite right. Being I’m still the skeptical Fool, I wanted to do a brief roundup of recent dubious UltraViolet coverage.
We all know what’s going on in the declining entertainment business, and today’s Financial Times does a nice job in telling it straight. In no uncertain terms, if Hollywood can’t figure out digital and address the decline in home entertainment, Hollywood will stop making movies. With big film concepts being shelved because they’re too expensive, we’re beginning to see the slowdown in new releases. It terms of digital dreams like UltraViolet saving the day, the FT had this to say:
Yet for all of the enthusiasm, Ultraviolet increasingly looks like a last throw of the dice for an industry desperate to preserve its retail business model. It is clear why Hollywood wants to keep selling movies: the profit margin on a DVD sale is more than 65 per cent – close to double the margin on a rental. Selling an electronic format is even more profitable because there are no manufacturing costs and minimal distribution costs.
But consumer behaviour has changed radically in the five years since DVD sales reached their peak, making it difficult to predict demand for a cloud-based rights locker. After all, consumers hardly lack choice when it comes to streaming movies or online TV programming.
The FT correctly sniffs out that UltraViolet’s positioning of selling $14 digital movies to consumers isn’t quite right. With more and more options to rent and acquire content, UltraViolet runs the risk of being vDOA – Very Dull on Arrival.
The Hollywood Reporter talks about how retailers are bracing for a holiday season that doesn’t look so bright. Retailers may afterall turn to digital to help ease their pain. Hollywood Reporter, however, points out a glaring pimple on the face of the industry’s transition to digital: like it or not, there may be TWO major digital offerings this Holiday. Disney’s All-Access with its Keychest digital locker competing with UltraViolet will supposedly be available soon (which is a bold statement to say that either will be ready). By the way, All-Access content won’t work in the UltraViolet digital locker and vice versa.
Execs deny they want to start a format war, but let’s get serious for a moment. There are two ecosystems that don’t play the other’s content. No format war? That doesn’t quite smell right to me.
Keep your eyes, ears and nose peeled for more critical news of UltraViolet. You’ll catch a whiff of something not right as well.