It's rare that simple bloggers like me ever get to break the big news--But today, May 1, 2018, I'll take that opportunity, and remember, you read it here first:
Ladies and gentlemen, the Digital vs. Physical War is OVER. There is no longer any tangible enemy to "threaten" customer existence or loyalty to Blu-ray and DVD disk.
It's not the moment to go out and smooch nurses in Times Square as of yet, but stand ready, over the next year or two, to pucker up.
The bad news for main digital-movie format Ultraviolet seems to have been happening in too suspiciously well-timed a storm between summer '17 and the spring of '18: Two of its major remaining merchants folded in the same month, Disney created a rival service out of the remaining non-Ultraviolet affiliates, and two major movie studios have already publicly abandoned future support for the format.
Where Ultraviolet was originally going to create the "Digital revolution" by joining together a media-wide network of online merchants, a quick check of their website today is down to three merchant affiliates--two of which have already defected to the competition--one cellphone provider, and three studio websites, one of which studios had already abandoned the format. If the network was going to be the iconic brand label by which the Digital Revolution of the 10's would be under, as movie sales go, it's quickly becoming clear that the Revolution will now not only be televised, it will not even be happening.
Ultraviolet's collapse and heave-ho by the studios does not singlehandedly ding-dong the Death of Digital--In best scenario, digital-download may in the end return to just being the set-top toy/app-tool and promotional curiosity it began with seven years ago.
But to have this massive industry-wide failure in the public eye now and forever strips digital-download of its fearsome god-like image to being a mortal creature like any other hit-or-miss business venture, to where it can no longer be seen by even the least tech-savvy executives as Invincible, Unstoppable and Inevitable. To quote Arnold Schwarzenegger from "Predator", if it bleeds, it can be killed, and to quote Damon Wayans from "Major Payne", if it ain't dead now, it sure ain't happy.
The decline of Ultraviolet in the marketplace is one of those unique failures in home-theater, in which the product was a privileged-child that actually did have No One But Itself To Blame:
Major-studio support was almost unanimous behind it from the rollout; it made sure to avoid a long, bitter and in-fighting tech-company format-war that might divide studios, delay titles and frustrate customer interest, like the ones that ultimately sank HDDVD, DiVX and Beta tape, and it was never the victim of bad timing and even worse manufacturer interference like the sad fate of 3DTV. Digital-download was offered to the public on a silver platter--to the point of force-feeding it with a silver spoon--and in the end, the public simply didn't buy it. Despite being told, sold, cajoled, schmoozed, rumor-gossiped, harangued, and even "scientifically" persuaded to their faces why they "did", or peer-pressure bullied why it was "obvious" that everyone else besides them did...the public simply didn't WANT it.Even when 4K UHD's format was being crowned the new presumptive heir to home theater's throne before the devices and screens had hit shelves, rollout plans were gridlocked by long tech-vs-studio stubbornness--with delusions of grandeur on both sides--over whether the new 4K industry was going to be dominated by movies on physical UHD Blu-ray disk or movies on UHD download. 4KTV has since arrived, and among its new faithful early-adopter community, the excited buzz is about which studios will leap onto the 4K UHD disk classics, with dazzling new sound and picture, and when they'll get that chance to upgrade their physical favorites...Nobody is talking about 4K streaming. Digital lost its second battle in its own virgin marketplace before it even had a chance to be fought, and that's a record that's not boding well for any future battles.
It became, quite literally, The Format-War Where Nobody Came.
For the average folk trying to get a grip on what's happened, we need to start with the basic question: What was Ultraviolet?
And when, in studios' minds, did Supply take complete priority over Demand?: Why did studios take such a personally invested concern that the technology must exist at ALL for the audience's own good--and must be THE Future of home theater, nothing less--regardless of the audience's lack of sales or interest in it?
For that, we have to go back to the beginning. Heck, even further than the beginning. We have to go back to YouTube.
As streaming video found its niche in the mid-00's, studios, wanting a piece of Where Those Internet Kids Were Going, thought they could sell their movies in that marketplace, before those same movies might end up there for free. To this day, you can still buy Universal, Disney and Paramount VOD movies on YouTube, and if you had no idea in the last twelve years that you could, that gives you some idea of how popular the idea of charging folks to watch YouTube took off.
There was only struggling interest in online movies, since it required a new startup business, but nobody seemed to know precisely where, if not YouTube, customers would watch them--New services like Amazon's and Hulu's tried to sell their movies for the desktop browser and smartphone, and apart from Playstation/X-Box game consoles with their own private movie stores, the only major living-room competition was Apple, reshaping its iTunes video store for its own AppleTV set-top box. iTunes was not popular with studios because of Apple's insistence on set prices, and studios looked to back, or create, a new competitor that would let them charge whatever price struck their fancies.
But it was Microsoft--who by 2008 had just suffered a humiliating defeat backing Toshiba's HDDVD disk format, but still hoped to ultimately win the war by cornering the market over its competitors in new online hi-def movie coding--that became the sour-grapes PR devil on the industry's shoulder. And slyly whispered in its ear "So Sony won the Blu-ray battle!...So what? Let 'em keep it--Disks are so last week! Everyone's been saying physical retail was already on the way out anyway, and the future's in online movies and mobility!" And guess who would come to the rescue on those innovations.It instantly became one of those statements industry analysts heard and repeated from someone else without checking the source. The long Blu-vs-HD war had wearied a LOT of the industry and consumer base by '08, and to hear a rebellious "Who cares??" knock the two heads together was just too good to be true for a lot of consumers that still didn't want to plunk down $1500 on a new investment, or for companies hesitant to commit themselves to one more difficult-to-sell hardware-tech rollout.
The studios didn't want a repeat of 2006-08 either: The industry agreed that if a new online market was created, studios would have to agree to back one format from the beginning, leaving the market to be decided only by Who sold Which movies, not How.
With Cloud Storage as the new tech buzzword, studios in 2011 announced their content support for the Digital Entertainment Content Ecosystem, now brand-named Ultraviolet (changing its tech abbreviation from DECE to UVVU), a "digital locker" that would handle the central storage for customer's libraries of purchased/unlocked digital-movie titles, and merchant apps and services would sell customers the rights to download movies from that cloud-account.
The immortal slogan promised viewers nothing less than "All Your Movies, Forever"--Meaning only, that if even one viewing service went out of business, your movie was still safe in the central account, and could be accessed from another participating service. Wooed by the slogan, defenders took it a little too literally, and dreamed of the public throwing all their disks off a cliff in holy sacrifice, so that their movies would forever reside in a heavenly Cloud, safe from physical harm or burdensome storage.
No one thought to ask what would happen if Ultraviolet itself went out of business. Back then, it was too big, too safely sheltered from the market, and too unlikely to ever happen.
Preparing for Ultraviolet's big debut in October '11, Warner acquired movie-info social-media site Flixster, and rebranded it as Ultraviolet's new right-arm on day one, a place to watch your movies while you talk about them with friends! Flixster was unusual in that it was the only UVVU merchant-app with a STUDIO owning the major interest, and in whether digital or disk had the bigger customer outreach. The studio also pioneered the idea that you could immediately transition your library away from disk and into online, by including free UV/Flixster purchase codes for the title inside new Blu-ray disks. If anything, Warner knew how to drum up its own business.
Three of the other later companies came from retail chains: Wal-Mart created Vudu, specifically to promote their "Disk 2 Digital" promotion, where customers could walk into their local Wal-Mart and "upgrade" their disk to digital rights for a small fee without completely re-buying the title. Target and Best Buy immediately competed for in-store upgrade business, Target creating Target Ticket, but Target Ticket was so badly managed and entered the game too late to take on iTunes and Amazon's device-based share of the market, the service folded in less than two years. Best Buy acquired Blockbuster's old attempt at an online Netflix competitor, and attached it to their retail chain as CinemaNow, but sold off their interest in 2014, and the service limped along under new owners for another three years.Like Bitcoin and self-driving cars, the "future of digital movies" continued on in a stalemate for that three to four years, with more evangelism from the faithful about what was going to happen than actual sales or market share. But, like any other overenthusiastic Bubble of Dreams, sooner or later, something has to pull the bottom out of the house of cards:
Warner had since sold its market share to ticket-website Fandango, who had already bought up struggling early failure MGo to turn into their own "Fandango Now!" UVVU service. If Warner had hoped that merging Flixster and Fandango would create an even bigger player, they got a shock on August 28, 2017, when Fandango kept their own service and folded Flixster. The ripples were already being felt--CinemaNow's owners dropped the UVVU movies that same month, switched to a TV service and started putting their affairs in order. With almost no one left to sell to, Fox announced in November ' 17 they were dropping Ultraviolet from future digital rights, and Universal followed in January '18.
As those who've seen past format-wars will tell you, companies can change hands or marketing, but when studios remove their support for future movie content, the game is over. Studios do not like blame, and are very quick to kill the scapegoat, by their own hands if possible.
Disney, meanwhile, in March '18, took their name off their isolated Disney Movies Anywhere service and rebranded the new "Movies Anywhere", by linking themselves with successful survivor Vudu and the three other stubborn non-Ultraviolet holdouts: Amazon, iTunes and GooglePlay, three device-exclusive services that originally preferred to sell to their own captive customers without any help, thank you...And even Fandango Now. DMA already had experience linking movie accounts with their disks, offered customers easier use, and now that it has to back a new horse in the race, the industry is making a great show of moving their love to the New Kid in Town.
But unlike Warner, Disney does not have the same terror of the physical retail market, and in fact, probably the opposite: They know very well that they have just as much a sales foothold in physical DVD and Blu-ray, and prefer having All of their sales rather than Part of it--The studio is pitching MA as a convenience option, and maybe even an option to get their money faster than mass-retail, but no longer THE option that moviegoers must now embrace or fall behind.
Even Warner, that once leading-question surveyed its customers "What do you like best about digital?", in February began preliminarily surveying its customers the more nervous question of "What do you like best about Movies Anywhere?" General, hand over your sword.
Next week, Pt. 2: So...what went wrong?
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