Top 10 Film Industry Stories of 2011: #5
Lockers Go Digital
By David Mumpower
December 28, 2011
The unheralded aspect of existing digital locker services is that they provide options that more popular services such as Netflix and Redbox lack. The aforementioned Vudu is now owned and operated by Wal-Mart. The presumption is that they purchased this company in order to block Amazon from gaining an unbeatable monopoly in the marketplace. Yes, Apple and Netflix have strong market positions right now but everyone in the industry is watching Amazon warily.
In an attempt to gain a competitive advantage over the current king of all digital media, Wal-Mart brokered a deal with Disney and a few other movie distributors. The rights they acquired engulf the hottest style of film right now, 3D programming. One of the dirty secrets of the Blu-Ray industry is that 3D discs are extremely expensive, regularly selling for 50% more than standard Blu-Rays. The average Amazon selling price for a 3D box set right now is around $29. This disc is not available for rental at Redbox or Netflix yet, because neither of these services even rents 3D Blu-Rays as of now. The technology has not attained strong enough market penetration to justify the added expense.
In a masterstroke of niche marketing, Wal-Mart’s Vudu service upped the ante in January of 2011. Vudu enabled the rental and/or purchase of notable 3D titles such as Tron Legacy and Toy Story 3. The particularly noteworthy moment was when The Lion King ended a triumphant theatrical return with a 3D Blu-Ray release. At almost exactly the same time the impeccable 3D Blu-Ray box set entered the marketplace, Vudu sold a license for the 3D version of the film for $21.99. For less money than the physical disc, a consumer could purchase the same viewer experience with this content permanently stored in a digital locker in the cloud.
The Lion King in 3D on Vudu is the way the movie purchase process will work in the future. Through a series of mouse or remote clicks, a consumer can buy a permanent content license that enables the highest quality viewing of a film for a single set price. The era of George Lucas/Peter Jackson upsell resells is reaching its end. Start building your digital media lockers now. 2011 is the year where it has become the savvy consumer behavior.
Continued:
1
2
3
4
Print this column
