IHS Tallies 50,000 UV User Gain Since CES

By Greg Tarr -- TWICE, 2/22/2012

El Segundo, Calif. - UltraViolet, the multi-industry effort to provide ubiquitous digital access to purchased movies, has passed the 800,000-household user milestone in the United States, according to a new study released Wednesday by IHS Screen Digest.

The firm's "U.S. Video Market Intelligence Service" report found that UV has made rapid progress since the first UV-enabled DVD and Blu-ray Discs (BD) were sold in October.

Consumers have redeemed digital rights to 1.25 titles, meaning U.S. consumers now have added more than 1 million films to their digital film collections via UV-enabled discs.

"One million may not sound like much compared to the 504 million movie discs sold in 2011," noted Tom Adams, principal analyst and director, U.S. media, for IHS. "However, we have projected that only 19 million digital film files were sold during the entire year of 2011 by electronic sell-through vendors like iTunes, Xbox Live and Vudu. This suggests that if UV can continue to gain momentum this year, it could encourage consumers to buy more movies. Movie purchasing represents an important priority for movie studios, which have seen their film sales dwindle in the face of growing physical and digital rentals and streaming services like Netflix."

The rental business has dramatically outperformed the purchasing segment in recent years, with the number of U.S. digital rentals amounting to more than three times the total for digital purchases in 2011, IHS said.

Consumers spend more per movie watched when purchasing a film than when renting one, on top of which as much as 80 percent of consumer movie purchase spending flows through to studio top-line revenue, whether of physical discs or of digital versions, according to the report.

Retailers and distributors keep the majority of rental and subscription spending, rather than passing it back upstream to studios.

UV is a common file format and digital rights authentication system designed to allow a digital copy of a film or television show bought from any vendor - physical or electronic - to be played on any one of 12 devices owned by up to six members of a household, either via download or streaming from the cloud.

The UV ecosystem is designed to allow users to view the content they have purchased - on disc or online - on a growing number of Internet-connected devices, including UV-enabled BD players, TVs and media tablets.

IHS said that beyond the large number of accounts achieved in less than four months, the quickening pace of commercial activity around the UV format has heartened studio execs in recent weeks.