The Twilight of Digital-Download, Pt. 2: So...What Went Wrong?

The story so far:  Since summer '17, major digital-rights locker service Ultraviolet, the network that was promising to join all studios, devices, and retail chains into one big glorious network that would bring customers their digital movies on the go, has seen all but three of its merchants go out of business, seen its remaining business defect to its new Disney competitor, and has already lost support from two major studios...Will our hero survive?  Don't count on it.  I'm not.

I was looking for a metaphor to try and Monday-morning-quarterback the one reason that the digital-locker industry never quite caught fire as much as studios hoped it would:

Gosh, they thought they had done everything right, in pitching their product to Those New Millennials And Their Cellphones, who hate physical purchases, and it offered such a shiny new promise of recouping theatrical losses sooner in "preorders" without having to wait for physical manufacturing and retail rollout...Why, seven years later when the dust settled, and their one "brand label" became a ghost-town, didn't it just catch on?  Was it the public?  Was it the technology?  Was it their deodorant?  Was it something they SAID??

Some thought it was the technology:  The "Join or die" industry policy to back Ultraviolet made things even more confusing for casual customers who didn't want to commit to a preset selections of app services to access it, and many who didn't go shopping for the right app service found the one they registered to be poor and clunky.  A few tech columnists at the time, who'd raised their hopes about the service, even openly blamed the two-step movie purchase, the lack of big-player iTunes and Amazon, and a need for a third-party app on tech devices, for why it "didn't catch on with the public".
Ah.  That must be it.  Despite massive pushes in publicity, and free gifts from every direction, the public expressed unprecedented apathy and sales-bottoming figures toward the entire format over five to six years, creating the near-collapse of the industry, because the app was confusing...Nice to get simple explanations for these things.

But y'see, I was making the same mistake too:  I was looking all over in industry theories, and audience concerns.  If studios wanted to post-mortem a simple What They Did Wrong, they should have just gone back to their old children's folktales.

The story of Epaminondas--oh, I remembered reading this one--was a funny folktale that's since been cleaned up out of its turn-of-the-20th-century African origins to represent just about any kid's basic mistakes:

Our hero is sent to the market by his mother to buy some cake, and when it comes home squeezed into a tight handful, his mother tells him, "You don't carry cake that way, put it under your hat!"  

Next, he's sent to pick up a pound of butter--It's a hot day, he goes with the one bit of advice he knows, and things don't end well.  "You don't carry butter that way, you dunk it in ice-cold water first!"  

The next day, he's sent to pick up a puppy...Okay, that doesn't end well.  "You don't bring home a puppy like that, you tie a string around it and let it follow along behind you!"  

The next day, he's sent to bring home a loaf of bread...Er, no need to drag this story out any further.

The ultimate fault of digital-download seemed to be in the industry's utter blind faith that they had something they could sell, and that it was just a matter of selling it now that they thought they knew how:  In every debate where uncommitted supporters asked "But why would the public simply throw over all their disks tomorrow, if they've found them reliable up until now?" the only--the only--rebuttal ever offered, apart from the usual Important-Sounding sociological study of the week or news about trendy cable-cutting, was "They're going to!  It's just a matter of time, if you saw what happened to CD's and magazines!...It's FATE!"
Basically, not so much faith in their product, as, like well-meaning Epaminondas, an industry that looked at the painful out-of-nowhere lesson they'd learned from the decline of CD and print media, and believed they were now armed with their one bit of advice to handle the scary new challenge ahead of them.

And when they kept trying--and trying, and trying--to apply the successful MP3 mobile-music formula to the high-definition living-room demands of home theater, they kept dunking that poor puppy in ice-cold water until it howled.  They simply couldn't understand, in their own minds, why we wouldn't want to take our movies "on the go", the way we could with our iTunes playlists.  

Neither theory is 100% wrong, and neither theory is 100% right--There are no innocent parties standing over UV's corpse, and a lot of basic conceptual mistakes made at just about every stage. The top seven reasons, in no particular order:

1. Execs don't really understand that Geeky-Techie Stuff:  

If you don't understand how your car or computer works, how are you going to know when it breaks down?--Let alone how to fix it, or whether or not to get a new one?
And if you don't happen to keep up with current home-theater formats--if you considered yourself smug-Luddite enough to sit out the last couple Format Wars and just download a recent on-demand hit from your satellite provider once in a while when you had the time--how many theories can you make about why Blu-ray beat HDDVD in a long fair fight, why DVD wiped VHS off the face of the marketplace, or why more kids are listening to MP3 on their earbuds than on CDs?  You can spin the standard marketing-voodoo to theorize why the new pushes took hold with the public, but if you're not in said public, it won't help to guess from the outside.  Like jazz, If You Have to Ask why Blu-ray crippled DVD, You'll Never Know.
And most hardware and studio execs simply didn't:  What they knew, from long battles in commerce, was that somebody had stubbornly hung onto VHS or Vinyl LP longer than they should have and paid the price for it...And this time, it wasn't going to be them.  This, at the same time as they were still defining "Physical disk" = "DVD", and reporting "declining" DVD retail-chain numbers in the 2010's, while still in 2008 mode of passing off Blu-ray as "a limited niche market among home-theater techs" and reporting those sales figures as mere footnote statistics.  Gosh, nobody's buying DVD's from retail stores in 2017?...That sounds serious!

2.  Mainstream audiences don't really CARE about that Geeky-Techie Stuff:  

At least not as evangelically as the industry hoped they would, in imagined mass-demonstrations of smashing their Blu-ray disks with big hammers and crying "Die, obsolescence, die!!"  While the industry hoped Ultraviolet would join the public in a new network, most users who did buy or rent digital tended to think only in terms of where and on what most convenient device they could be able to watch it--namely, whatever Internet thing they already owned--and didn't quite pick up on UV merchants' promises to "watch on any device":  Those with Kindles and Fires tended to buy from Amazon, those with AppleTV's and iPhones tended to buy from iTunes, those with Androids frequented Google, etc...Hey, it was there.  
The problem?  None of those services supported Ultraviolet.  Isolation became a big problem for all the services, and some of the services began linking their user libraries together in the mid-10's, to try and take the "network" where the customers actually were.  Up to that point, however, those customers who were curious enough to take Warner and Universal's first-one's-free invitation by redeeming their free Blu-ray disk codes found themselves frustrated that they had to do it by signing up for the extra step of a Flixster service or website registration they didn't want, and then, that the movie wouldn't PLAY on their Fire, iPad or Android tablet without that extra service.  Like streaming, a dozen players were trying to sell to a customer who only wanted one shop.  The need for a poorly designed second app, only reminding them that they could just as easily get a movie from Amazon or iTunes in one playable step, didn't help much either.

3. Problems in communication:

We were told a lot about how "successful" digital was in the marketplace.  An AWFUL lot.  Studios went out to spread the news, heard it reported, and, like presidents on their Twitter accounts, spread the big news that someone else had said it too!  The problem was, no one had a clear idea of what exactly they were saying.

Ultraviolet's success--and by it, digital's--was measured in the industry press by, quote, "Thousands of new subscribers this year!  Over a million movies in customer's libraries!"  Yes, they enrolled, and the headlines sound nice without messy details, but someone had forgotten to itemize the messiest:  How many of those movies had those new subscribers actually bought?...Businesses get by on customers paying them money, you know.  Customers needed to enroll free memberships with Flixster or other merchant-apps just to redeem their first free Blu-ray disk-code out of idle curiosity; what they did with the service after that--if anything at all--was never reported.  And if I happened to be stuck with a free Warner promo-gifted copy of Chevy Chase in "Vegas Vacation" as a free signup bonus, that I didn't know how to remove from my UVVU library, I didn't consider that title to be yet one more of the "Million or more!" library titles that satisfied purchasing customers were now enjoying for life.  
That's rather like giving someone a free kitten, dumping eight more on their doorstep, and then pointing them out to everyone as the "Crazy cat lady".

4.  "You keep using that word...I do not think it means what you think it means."

The other messy detail was, what exactly was the big D-word in "Digital is bigger than ever this year!", and who was enjoying all that success?  In the majority of cases, it wasn't even rights-locker.
To execs and the industry, it was...y'know...that cellphone and binge-stuff, and that little Google plug-in thing!  Netflix-mania was just coming into trendiness, and analysts trying to analyze the big move away from cable and broadcast found they couldn't throw a rock in any direction without hitting Transparent's Emmy or Stranger Things "original series" fan-hype in the press to remind them of where the public was going.  But Digital is not "one" magic neato-10's industry, as those tech-illiterate analysts believed, it's THREE:  Rights-locker purchase, subscription-streaming, and on-demand rental.  Two of those industries did very well over the past seven years, and took hold with the public as the new pop-tech standard.  One of those three did not.  

You did not read a praise of Digital's "success" in the home-theater marketplace without reports of Amazon's latest profits, or how Netflix subscriptions were rocketing to the sky with millions of new binge-cult watchers, put up almost completely as evidence--In the industry's mind, Netflix streaming WAS digital download, and vice versa, end of argument.  If you watched programs on Netflix rather than pay for expensive monthly cable, that meant you liked digital things, QED.  And if Netflix is doing better than ever this year, well, that just proves it, doesn't it?
By logic, that's rather like saying "Lemons are enjoying new popularity, because apple and banana sales pushed fruit to its best year ever!"

5. "It's HIS Fault!"

Usually, when there's some new craze that's going to Change The World As We Know It, the news is usually coming from one of several hundred enthusiasts on the Internet who found each other and got together to declare that we'll all be speaking Esperanto, eating Gluten-Free, and spending Bitcoins in the next generation, whether we like it or not.  
Digital-download, OTOH, was different in that there was plenty of theorizing about "why" it was going to become either such an inevitable convenience or blight on our culture, but not counting the studios, very few of those doing the theorizing were actually in the camp themselves--Analysts shrugged to explain why "somebody" was the reason Digital would ultimately take over someday, a Somebody who was nice and safely distant, and whose motives were already crazy enough to ever explain, so we old duffers might just as well take our medicine and settle in.

Industry analysts blamed those darn Millennials, and their tendency to "Rely on the Internet, and refuse to buy longterm physical goods".  Millennials, who didn't care how mangled a movie looked on YouTube as long as they could track it down there for free, blamed those "Greedy studios", trying to make them buy their movies one more time.  Regular Net users unhappy with the Flixster-signup process blamed those Internet enthusiasts who knew how all that social-media stuff worked; Internet enthusiasts who found their movies intrusively attached to their Facebook account blamed normal users who were gullible enough to fall for any sales pitch.  Diehard movie-night buffs, refusing to give up their good-looking disks, blamed the casual philistine who didn't care how he got his new-hit rentals instead of the restored classics, and the casual user blamed the diehard movie buff who wanted his movies everywhere, since he didn't know why he couldn't watch his own free movie on Amazon.
Digital is more popular than ever with someone this year, we just...don't quite know WHO.

6. Welcoming Our New Overlords:  

If the industry, as the users did, saw cloud-locker as a useful tool for home-theater watching, they would integrate it into their new selection of options for available viewing.  But they didn't, had no clue what they were selling, and knew only that it was the New Thing that comes along at the CES Show and replaces everything within two years...Y'know, like Uber and Alexa did.  
As a result, there was almost no strategy imagined from the very get-go in which users might watch disks at home and digital on the go:  For a great many other reasons, users were helped along by the studios--with free gifts, retail-store services and propaganda--in the difficult inevitable change of converting their entire library for the Great Day of Change, as presumably the whole country would at some future point.  And if customers complained that that wasn't what they wanted, well, they were clearly the ones afraid of Mighty Progress.
Remember when you surrender, you only do so out of fear.  And there's no one old executives fear, misunderstand, puzzle over and try to court more than Those Crazy Millennial Kids Glued to Their Smartphones, Who Live With Their Parents Because They Won't Buy Cars or Houses...Them kids, what're they, nuts?

7. Ask For It By Name:

Studios in the 10's are not in the business of selling movies...They are in the business of selling STUDIOS.  Namely, their house-franchise brand-names, the sticks-and-stones in the war they fight on the schoolyard with the other studios, and the new "franchises" the audience creates out of nowhere with every new hit film.  
And in digital-rights, "Deals", "Packages", "Bundles", and "Bonus movie tickets" became the name of the game:  The purpose of digital was not to sell you the rare high-definition print-restored version of Sunset Boulevard, when they could sell you a house brand that was already being cross-promoted in theaters.  Warner did not give a flying Kryptonite fig if you wanted to buy only the 70's Superman movie with Christopher Reeve that you saw when you were little, or because you preferred Reeve to Henry Cavill; it was there to sell you the DC Universe labels, in the hopes you'd buy the whole conveniently-priced bundle of seven in one conveniently-priced package, in time for the next DC Comics movie, coming to theaters this summer.  Or Harry Potter.  Or Lord of the Rings.  Or Universal's Jurassic Park.  Or what-have-you.  Selling a sequel-promoted title on digital would recoup the theatrical debts from the last movie, and add to the profits needed to make the next in the hit brand label, and the next.
Studio execs didn't understand the experience of how customers watched the classic favorite movies that struck a personal chord with them, because studios didn't believe they were selling experiences--They were selling "franchise outreach" for merchandisable titles that they owned, because that was the studio's product.  And hey, why would it matter to you how you watched the latest Superman movie?...It was a HIT, wasn't it?  "Hit" means it's popular, so you want it, and here's an easier way to get it!  You're going to be picky about it??


8....Yes.  There is one more reason things went wrong.  A big reason.  No one likes to say it, but it may have been at the top of the list.  And which got ugly between the core movie-watchers and the invested studios REAL fast.  
In the end, it may have been the One Reason to Rule Them All why the rights-locker industry made no friends among the discerning film-buffs it first tried to court, and then tried to snub as "unnecessary", mock, trivialize, paint as harmless eccentrics, and then push out of the way when those "inconvenient" customers turned out to be in no mood to play along with what the majority of Joe Strip-mall clearly wanted.  A bit of frustration-enabled wishful impatience that said the wrong thing at the wrong time, continued to double and triple-down on it with resentful stubbornness over a series of years, and turned what started out as a mere trendy-eyed marketing grudge into an all-out genocidal and ideological war, in the minds of both sides...On the level of a good-vs.-evil Armageddon to decide once and for all future generations who would literally still be standing on the face of the earth, who claimed the right that they "deserved" to, and who had learned their lesson about ever trying such a stunt again.

But that's a long story.  It'll have to wait for next week.