nScreenMedia OTT multiscreen media analysis

nScreenNoise – Why Disney’s victory over UltraViolet cost the industry too much

nScreenMedia Video Podcast

With the announcement that four major studios are supporting Disney Movies Anywhere, it looks like curtains for Ultraviolet. However, the cost of winning the war was not worth battle.

Chapter 1: Four studios join Disney Movies Anywhere (0:30)

Fox, Sony, Universal, and Warner Bros announced that they would support Disney Movies Anywhere this week. Paramount and Lionsgate have made no announcement yet. However, Lionsgate supports the initiative, and we should expect that both will eventually join.

Chapter 2: Four movies stores are supported (1:19)

Four of the five main movie stores have announced support for Disney Movies Anywhere. Consumers with purchased movies with iTunes, Google Play, Amazon Video, and VuDu can connect their accounts to Movies Anywhere. Purchased movies from the five studios supporting Movies Anywhere will automatically show up in the Disney app. The app is available on all major connected devices.

Comcast reached an agreement with Disney to support Movies Anywhere in April of 2016. As yet, however, Comcast subscribers that have purchased movies in the store cannot view these from their Movies Anywhere account.

Chapter 3: Death knell for UltraViolet (2:22)

UltraViolet has been struggling since 2011 to establish itself as the standard for the storage of electronic versions of movies. The UltraViolet consortium was never able to persuade Disney to support the standard. Instead, Disney stubbornly stuck with its Key Chest approach, later renaming it Movies Anywhere. Sony was a big proponent of UltraViolet. It must have been difficult for the studio to decide to support Movies Anywhere.

Chapter 4: Too little too late? (3:23)

Reaching agreement on single online movie storage standard has taken much too long. While the movie industry has been fighting over Movies Anywhere and UltraViolet $3.5 billion has vanished from annual disc sales revenue in the U.S. Over the same period, online movie sales have only increased $1.4 billion, to $2 billion.

However, the real harm to the industry is not in lost revenue. Over the last seven years, consumers have changed their habits. They have replaced movie ownership with access to SVOD libraries like Netflix. They have also replaced the time they used to spend watching movies with time spent binge-watching serialized drama series in SVOD services. Simply put, many people have gotten out of the habit of watching movies.

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