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UltraViolet: a 12-month contract, no ad infinitum compact

The Digital Entertainment Content Ecosystem's much-touted UltraViolet service, that allows consumers to purchase digital content and watch it wherever, whenever, across multiple platforms, is to launch in the US by mid-year, followed by an international deployment later.

"Details of the usage model, the rights to stream or download to any device, or to make a physical copy have been ironed out," Speaking for DECE, Frank Bryant, Head of International Market Development at 20th Century Fox Home Entertainment, announced at the recent PEVE conference in London. "Specs and licensing agreements are available to third parties. This is not just a nice idea, this is happening this year."

For recollection, a household will be able to create a UltraViolet account for up to six members who can then access UltraViolet movies, TV and other entertainment via participating retailers and streaming providers. Consumers will also be able to register up to 12 devices so UltraViolet content can be downloaded to those devices, or shared among them.

However, PEVE delegates got more than they bargained for when they learned through a circumvolute answer to a question that purchase of streaming or downloading digital rights is for an initial 12-month period, not the one-off transaction to secure in perpetuity access to the paid content, thus undermining UltraViolet's widely perceived advantage over just owning a disc.

UltraViolet's website does little to dispel the perception. The homepage notes: When you purchase UltraViolet media - as Blu-ray, DVD or Internet download - you get much more than just a single file or disc: You also get the enduring right to access your content on any UltraViolet device registered in your Household Account. You can also enjoy your UltraViolet entertainment via streaming through devices at home or on the go. Nowhere on the site are potential customers informed that the deal is not a one-off transaction, but essentially a potentially renewable time-limited transaction.

The motto 'Buy it, own it forever, play it anywhere,' restated by Tim Wright, VP Worldwide New Media and Technology at Sony Pictures, turns out not to be exactly the deal on the table. "Actually, as I understand it, it's buy it, have streaming or downloading rights for 12 months," retorted Ben Keen, Chief Analyst at HIS Screen Digest and the panel moderator. "After 12 months, the consumers might have to pay something more."

"We got to strike a balance between meeting users" expectations and requiring retailers and video streaming operators to be bound to long-term commitments," Bryant was at pain to explain. "So, we decided to require those retailers selling Blu-ray titles with UV rights to include three downloads of the disc content and a year of streaming. It avoids streaming providers charging users every time they view their content. We do not make retailers sign a contract to offer streaming in perpetuity."

What happens after 12 months "We leave it to the market to come up with a sustainable business model that the user likes," Bryant says. "If a retailer thinks there is sufficient value to continue to provide free streaming rights, it may draw more traffic in its store."

Rob Slater, Category Director, Entertainment at Tesco, the UK's largest supermarket chain - and a DECE member - sounded a warning. "You can keep a £3 disc forever whereas rental transaction is ephemeral. People should be able to rent, then buy the title if they like it. Anything that casts any doubt on the perpetuity ownership of a title is crucial and is not replicated by a system where people buy access rights for a limited period."

Essentially, the perpetuity access 'right', so to speak, resides in the Blu-ray disc consumers purchase. "The view that digital download is a replacement for physical media is fiction right now," says Wright. "We expect consumers to buy a BD disc which they can play forever. Streaming is an extra convenience where the concept of perpetual streaming rights is less important to them as they are already used to subscribing to a variety of services."

If so, it was not obvious to some delegates what consumer demand UltraViolet fulfills that "double-play" or "triple-play" boxsets (Blu-ray + DVD + Digital Copy) does not. This concept already enables consumers to transfer digital files contained in the DVD or BD disc onto laptop computers, games consoles and portable devices such as iPhones and Blackberrys. Unless, as both Bryant and Wright implied, UltraViolet streaming is meant to represent an extra source of revenue to content owners.

Given the difficulty for many assembled professionals and executives at PEVE to come to grips with the intricacies of UltraViolet, making it crystal clear to the wider consuming public will be a challenging proposition.

"[UltraViolet] is solving a problem consumers do not have. People have the desire to own things, buy and collect. Then there is consumption. In a world purely based on consumption, the challenge of how consumer will value and pay for consumption is unclear," adds Slater.

Story filed 31.03.11

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