Amazon in Talks to Join Digital Locker for Movies
E-Commerce Giant Might Come on Board With Studios’ Cloud-Access System
By BEN FRITZ Oct. 9, 2014 7:19 p.m. ET
Warner Bros., the maker of movies such as ‘Edge of Tomorrow’ with Tom Cruise, is one of the studios in talks with Amazon. Warner Bros/Everett Collection.
Amazon.com Inc. is in talks with at least three studios to join the Ultraviolet digital-movie “locker” consortium, according to several people with knowledge of the situation. Such a deal could jumpstart Hollywood’s effort to expand the $2 billion-plus online movie-sales business and make Amazon a bigger threat to market leader
Apple Inc.
Ultraviolet allows people who buy movies from any participating digital retailer, or who redeem a code from a Blu-ray disc, to access an entire library from most Internet-connected devices.
Currently, people who purchase a digital movie from Amazon can watch it only via an Amazon app, while movies they buy from Apple’s iTunes Store are listed separately in that app.
Backers of Ultraviolet have claimed digital movies will be more appealing to consumers when they have a single online collection, or locker, much like a shelf of DVDs bought from different stores.
Amazon, which is No. 2 behind Apple in digital movie sales and rentals, is in talks with
Time Warner Inc.’s Warner Bros.,
Sony Corp.’s Sony Pictures Entertainment, and
Comcast Corp.’s Universal Pictures to implement Ultraviolet, the knowledgeable people said.
The total market for digital movie sales and rentals in the U.S. is projected to grow 25% to $2.3 billion this year, according to research firm IHS. Helping drive that growth, studios have begun selling most movies for several weeks online before they become available on DVD.
Ultraviolet is backed by every Hollywood studio except
Walt Disney Co. The online movie services participating so far are all relatively small players, including Wal-Mart Stores Inc.’s Vudu,
Target Corp.’s Target Ticket and CinemaNow, formerly owned by
Best Buy Co.
Notable holdouts have included Apple, Microsoft Corp. and—until now—Amazon.
Ultraviolet is viewed by the studios, in part, as a way to prevent Apple from gaining too much power over the sale of movies online, by banding together smaller competitors. Apple’s market share in online movie sales and rentals last year was 58%, said IHS, down from 75% in 2008.
An Apple spokeswoman declined to comment.
Ultraviolet has grown more slowly than its backers had hoped when it launched four year ago, due to the paucity of big retail participants, as well as early technical snafus. To date, the service has amassed close to 20 million registered accounts, each with about five movies, according to a spokeswoman.
Amazon’s participation could boost those numbers. With a market share of 15%, it is bigger than all of the digital retailers currently participating in Ultraviolet combined, according to IHS.
In addition to its strong position in digital movie downloads, Amazon is among the top three sellers of DVDs and Blu-ray discs for Hollywood studios, behind Wal-Mart and close to Target, according to studio executives. If it joins Ultraviolet, Amazon could enable anyone who buys a movie disc from it to automatically get a digital copy at the same time, without having to redeem a code. The retailer already does something similar for music, giving customers free online versions of albums they have bought on CD.
Blu-rays from most studios come with a code that allows people to get an Ultraviolet digital copy of the movie if they enter it online.
Talks with the three studios have been ongoing for several months, a knowledgeable person said. Technical questions involving how Amazon’s digital locker would connect to other participating retailers have been a sticking point. Amazon wants to have several Hollywood studios signed up before launching with Ultraviolet, the person said.
Several other prominent digital movie retailers have kept their distance from Ultraviolet. Most notable is Comcast Corp., which started selling movies to its cable customers late last year and has already become a strong competitor, according to studio executives. Despite owning Universal Pictures, one of the studios that back Ultraviolet, the cable company keeps movies it sells within its own silo of set-top boxes and apps.
http://online.wsj.com/articles/amazon-in-talks-to-join-digital-locker-for-movies-1412896797
I'm all for this!! Amazon Instant be having the best prices of all the VOD services.
Buying a Full 22-24 episode season of a TV show in Full HD on Vudu be costing like $50 (iTunes is similar), While It's only $20 on Amazon Instant.
