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UltraViolet, Hollywood’s attempt to spur consumer video purchases by offering cloud-based digital copies, has gotten off to a rough start this year. Nevertheless, according to a new report from IHS Screen Digest, UltraViolet represents the studios’ last, best hope to get consumers back into a buying mindset.

Here’s the situation, according to IHS’s principal analyst, Tom Adams:

“The U.S. video retail business is in decline . . . Although the rate of decrease moderated during the last two years from the double-digit drop in the recessionary year of 2009, we don’t see those declines turning into renewed growth without a fundamental change in the ownership proposition for consumers.”

Adams believes that UltraViolet has what it takes to offset the decline in physical disc sales and the stalling of the electronic sell-through (EST) business:

“We think it’s important that UltraViolet is being launched not so much as a feature of EST files, but as a value-added feature of the digital disc, on which consumers have spent $113 billion since they were introduced in 1997 . . . Even if our projections are correct that annual disc sales in the United States will have declined in 2011, that’s still about 14 times the size of the EST business. So, there are two advantages to a disc-focused strategy. First, tens of millions of the studios’ best customers will be quickly exposed to the UltraViolet pitch in the box. Second, if UltraViolet it sparks just a 7% increase in consumer disc buying in the years ahead, it would pay off for studios as much as a doubling of the EST business.
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If the studios can make the UltraViolet experience simpler and more appealing to consumers, could Adams’ theory hold true? Or are Hollywood’s deepest, secret fears true: have consumers permanently shifted away from a “gotta own it” mentality when it comes to home entertainment?

(via Home Media Magazine)

5 Responses to “Report: UltraViolet Best Hope for Ailing Video Retail”

  1. Member [Join Now]
    bart927

    I really wish the studios would actually listen to us consumers, (Who are the ones purchasing their stuff) and not their so-called analysts who just try and guess what we should want.

    The solution is simple… either bring back the quality and quantity that used to be part of the purchase….Or lower the pricetags.
    I really miss the discs loaded to the max with extra features and the 4 color insert and 4 color artwork on the disc.
    Movie previews, scene access and kid’s games are not special features.

    Just a few weeks ago there was a report the disc sales were up- the part that was left out was the fact that it was because of the discounted prices on Black Friday.. then, the second prices went back up, the buying stopped. Gee, that’s coincidental.

    That’s what this whole thing is really about, Studios want a way to just keep charging us and not giving us anything (yea, I’m talking to you WB)…. and I’m not paying for something I don’t own.
    UV is just an overglorified, expanded rental service.

  2. Member [Join Now]
    Barnbaby [barnbaby]

    I totally agree with bart927.

    I’m old school; I have a vast collection of vinyl from the 60s up to the present. The main reason for that is the cover art and extras.

    Blu-rays and DVDs and CDs are now a large part of my library, and I want that to continue, but I will not pay for less content and no physical presence.

    So to all you streaming services out there, I say good luck with that, but until there’s nothing else left, I’m out.

  3. Visitor [Join Now]
    Sgt Carter [visitor]

    Said it before – will say it again. No way – Consumers are not interested in a collection that you have to depend on the internet to watch. Also, you are trusting that they won’t go out of business and your collection goes bye bye.
    It wil be a cold day in hell before I would embrace Ultraviolet.

  4. Visitor [Join Now]
    Marshall [visitor]

    Regarding inserts. Paramount started it, as I recall, because some analyst somewhere said people didn’t look at them. Sure, we didn’t look at the ones that were simple reprints of the DVD cover. The booklets we looked at, even the ones with simple chapter listings and cast info.

    UV is a decent idea as it could in theory turn a purchase into something bigger than one disc. The problems are with the delivery method. I’ll accept DRM if I can just ensure that the digital version will last.

  5. Member [Join Now]
    ChadCronin [chadcronin]

    I still am not impressed with digital. Low bit rate, DRM, worrying about internet connection or licenses/rights, and also I sometimes have issues with video issues on purchases, also now I have run out of room on my laptop and I get sad when I heard about someone paying less for a DVD that had extras I didn’t get. Once there is higher quality HD contact w/o DVR and with extras I can upload and download for the rest of my life, then I will be more excited.