The Twilight of Digital-Download, Pt. 3: Of Course You Realize, THIS Means War...

So, as we see from the history, the Digital vs. Physical-Disk War between Digital-rights locker and Blu-ray disk--and whether we should now be referring to it in the past tense--was the result of a collection of blunders, wild misreading of trends, executives out of touch with their consumers, and, that old self-destructive enemy of business, wishful thinking.  Some columnists have wondered whether we should have been calling it a Format War at all, when it should have been downgraded to just a catastrophic Class 5 Format Blunder.

But make no mistake--Since 2011, Blu-ray and DVD owners have been at war.  They have been caught in a war they never started, have battled an enemy they had no reason to hate until they came under unprovoked attack, and have fought for the right to stay alive in the marketplace, for the very crime that they still existed...When another corporate party, who controlled a third of the available content, felt it more convenient for their sales model if they did not.  A minority of studio interests believed that wiping out a majority of customer interests would simply be an advertising/public-relations matter of winning Hearts and Minds, and that a trendy year or two later, a grateful public would never even think to ask what happened to all those buried bodies.

Now, who'd ever pull a stunt like that?  Toss some of the means, motive and modus operandi around for the heck of it, and the answer shouldn't really surprise you.

There are a few things that, historically, almost every living-room Format War has had in common since VHS first battled Betamax tape:

The first is that in every single battle in which the competing products were the Home-Theater Collectible--like the DVD disk or the VHS tape--versus the Studio-Owned Pay-Per-View Rental option, at the early stages when the two players are still equal in the running with no winner ahead, the studios have always backed the PPV-rental option that protected their own omnipotent, unquestioned hands-on control over the movie content.  EVERY.  SINGLE.  TIME.

When Betamax first offered customers the new ability to tape Sunday's football game in their home, Disney protested the format and Universal rushed to block the technology in the courts, worried audiences might use it to, gasp, tape movies off of TV for free.  Later, when a VHS player was in every home, studio marketing played up the brand new option for viewers to order recent hit movies On Demand from their cable-TV and satellite providers--"Now you can fast-forward and rewind!"  Er, do tell.

When the fate of DVD was being decided in the mid-late 90's, major studios like Fox, Disney and Universal, and even reportedly major players like George Lucas and Steven Spielberg, rushed to back the inferior technology of DiVX--A disk system that would let viewers buy their movie on disk for $5, and, with the player connected to the phone line, continue to unlock their own movie for a small 48-hour pay-per-view charge every play.  Even the promo video showed poor home moviegoers, desperate for entertainment, being bestowed the studio's generosity literally from on high, in a holy heavenly light.  History has since told us how well the reality of the paying audience agreed with that interpretation.

When DVD became the dominant format, studios and hardware companies rushed to back "Netflix-killer" ideas that would bring the one-viewing-only Blockbuster-rental experience to the home:  The preoccupation with creating a rental-based industry briefly introduced Flexplay, a disk you "didn't have to return to the store", since the disk erased itself after 24 hours.  Disney backed the idea as "ez-D", which barely made it out of test-marketing.

Few remember the Flexplay/ez-D--now reduced to an urban-legend at best--but even that has since stuck in the public's mind as the boogeyman symbol of the studios' fears:  Like the medieval monarchs that once feared the printing press, and what would happen to the state's monopoly on information once the peasants learned to read, studios have historically had a terror of the public permanently OWNING the movie in their own home on their own shelf.  The need to make audiences aware of "their" movie, and profit on it a second time after it left theaters, ran up against exactly the reason that DiVX failed and DVD succeeded--People simply don't like buying things twice, let alone a third, fourth or fifth time.  No matter how generous the good people selling it may be.

The second thing most Format Wars have had in common, is that it's not always the hardware company behind the technology that has had the chief interest in the race:

There has usually been a second, bigger, not directly-related studio, tech or retail company lurking behind the throne, that had staked its own fortunes on which product made it to the finish line, and promotes the format with more personally invested bloodlust in the outcome than the developer itself.  As master Yoda once said, always two, there are, in the shadows--The master, and the apprentice. 

The chief general in DiVX's war was not RCA or Panasonic that produced the technology, but electronics retailer Circuit City, which reminded us of their exclusive deal to sell the hardware--The chain never escaped the tech-disgraced image of being the company that "forced" the format on the public, which didn't help its stores drastically slashing its chain into Chapter 11 two years later.
Toshiba was not HDDVD's main villain in the Blu-ray vs. HDDVD war, but Microsoft, who hoped to see their software adopted as the new default standard for hi-def video...Microsoft not only had X-Box game consoles to sell the format, but its ties with Universal, and no HD spokesman became more public and hated than Universal Marketing VP Ken Graffeo's constant cheers.

So, bringing us up to the present war--Who was the shadow behind DRM's throne?  Who would possibly have the chief interest that the studio-controlled digital-rights locker format would not only hope to win public away from Blu-ray disk, but "replace" it?
Who attached itself to Ultraviolet, in full view of the industry, right from the first CES agreement?  Who initially outright-owned the service that offered you your first and "only" door to that free purchase code they were generous enough to include with their own Blu-ray disk, hoping you would be their own private customer for life and never, ever stumble upon another service?  Who believed that Ultraviolet's fortunes were their fortunes, even when what audience they had still clung to non-players like Amazon?

Do any of those answers involve the word "Flixster", that late-lamented service you never used and could never escape?  Now tell us who they worked for.

Like I said, it shouldn't be surprising:  Yes, this is a war.  And it's WARNER'S war.  They didn't want it to be anyone else's. 

It's an old trick of Warner's, who tend to be a bit more neurotic in their business practices than other major studios--For some odd reason, if a product misfires in the marketplace, they never believe in publicly blaming the product, and they never blame the marketing strategies...They immediately toss babies out with bathwater, blame the audience and their new "waning interest in the property", and rush to correct the waste of time they clearly made down that road.  But to simply declare the product dead and pull it off shelves would have their own fingerprints on the deed, and even worse, martyr the product with loyal fans who might start nagging them with annoying petition campaigns to bring it back.  Nothing inconveniently ruins a good funeral like mourners.  
So, Warner believes it must preemptively crush resistance and absolve itself from blame by persuading the consumers to do the dirty hatchet-man work for them:  Like making a leprechaun leave your house, Warner's pet strategy for covering up its one sales alibi believes it must first convince the audience to say, in their own words, "We don't like the product anymore!  It's outdated and silly...Who'd ever miss it?", and then, well, who is the studio to argue with the will of the public?  And in come the Good Generous People to come and sweep the embarrassing old thing away, and replace it with something shinier, newer, and more mainstream-demographically marketable to play with.
And if the public doesn't happen to be saying it yet, don't worry, they will.  A little old-fashioned consumer apathy can always be whipped up in the kitchen on demand.

The "Propaganda strategy", of telling a studio-convenient Big Lie loudly, often and nonstop enough until (hopefully) it's believed by the public, is one cartoon fans have already encountered, from their experience with Warner's own cable Cartoon Network channel:

From '99-'02, the network wanted to move into more profitable original series, but felt they were "held back" by being the parent-company's corporate Hanna-Barbera classic-rerun archive for the Smurfs and Flintstones.  The trick to changing the audience demographics from vintage reruns to new cable series, CN believed, was to spend three years on an all-out orchestrated campaign of blitzing viewers with nonstop tasteless, sophomoric, mean-spirited and witlessly humor-free stoner-rage hipster "satires" of 70's-80's Boomer-culture H-B lore--In the hopes audiences' minds would be indoctrinated into remembering the studio only for the crimes of Scrappy-Doo and the Wonder Twins, and just couldn't wait for those all-new cable-original schedules of Powerpuff Girls and Dexter's Laboratory to sweep in the Great Cultural Purge.  In the tasteful Warner tradition of selling their new product by publicly spitting upon the old one before rallying the audience to bums-rush it out the door for them, the network coined its most infamous slogan:  "Some people want to watch the same cartoons they saw as kids...Scary, huh?"

Translate that to home-theater, and you have exactly the message that Warner Home Entertainment is now trying to send to the retail disk industry.  Not the consumers, the industry.   The people that make and sell the disks.  Yeah...Scary.

WHE's complaints to the retail industry began spreading its own self-fulfilling prophecy--Citing their own numbers of "declining retail", and that they "couldn't sell" any of their catalog on wide retail except for their three brand-label leaders, Harry Potter, DC Comics and Peter Jackson's Tolkien, they reduced their mass-retail vintage catalog to only a handful of cult films and creatively repackaged editions of the Three Brandnames...All bearing gifts in the form of collector cases, large figurines, or other excuses to stand out on the shelf to target customers besides just a stupid old disk case.  That came to an issue in '16 with what became known among disk fans as "the $800 Bookshelf":  A repackaged set of the two Tolkien trilogies that passed over the director's own offer of extensive new bonus material, only to package it as an inexplicably priced uber-edition to appeal to what they believed was now a "small niche" of target collector fans, who could be counted on to pay whatever the market wanted, and if they didn't, see how few and hard to please they were?
The message WHE wanted to send to the other studios with their demonstrated warnings of "declining retail" was implicit:  Sure, you COULD continue to sell wide retail Blu-ray and DVD in the stores, but since "everyone knows" the only people who buy disks are comic-convention fanboys and eccentric niche-collector intellectuals, why WOULD you?
It's one thing to get out of a market, if you think it's not bringing you the profit you imagined.  It's another thing to poison the wells, salt the ground, and persuade the rest of the marketplace to follow your example for you.  Warner had a lot more than a sales urge to stop selling mass-retail disk...They wanted to directly influence the psychology of the industry so that no one else ever would sell them, and then they would just be one more innocent studio among many.  When Warner set out to rid the world of nasty expensive Blu-ray retail, they intended to make very sure that Blu-ray retail NEVER CAME BACK.  
And trying to meddle with an entire industry, let alone its evolution, is an area that's not only out of one company's jurisdiction, but one where they'd be better advised to simply mind their own damn business.

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And so, in the end, we must return to our original premise:  Digital Vs. Physical was all format-war fun and games at the start, until somebody had to make it personal.  Well, congratulations, Warner...NOW it's personal.
You took a technological innovation, and turned it into an ideological insult.  You took a tool to bring easier movie access to the public, and used it to wipe movies off the cultural landscape.  You took a wealth of new options for the consumer, and turned it into an autocratic symbol of consumer genocide.  You antagonized your potential allies by bragging to the world about how no one would ever miss them if they were gone.  You embraced your own imaginary "fears of the marketplace", and became that industry's greatest fear.  You gained no ground on the battlefield, you lost public hearts-and-minds, you not only increased public opposition against you but strengthened its moral resolve to a new level it hadn't seen in a decade, and saw your chief secret-weapon factory bombed to rubble in a fair fight.  Is this "your" war, Warner, with your name on it?  Because you appear to have just been officially defeated in it.
Is any product that Warner can't sell still caused by, quote, "Waning consumer interest in the property"?  Not to remind you of the obvious, but Flixster is now out of business, and Ultraviolet is rapidly following.   On behalf of the home-theater public, Warner, "Wane" THAT consumer interest--That's pretty bold talk for a product you spent six years never even being able to give away for free.

Next week:  The future--Making the peace...Can it be done?  It can, but it's going to mean starting from scratch.