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Walmart Launches Disc-To-Digital Service

3/13/2012 02:56:58 PM Eastern

Hollywood, Calif. - Walmart
and five of the largest Hollywood studios formally announced Tuesday an
in-store disc-to-digital movie service managed by the UltraViolet virtual content
locker system that will enable shoppers to purchase Cloud-based digital upgrades
of their physical DVD movies.

John Aden, Walmart general merchandise executive VP, joined executives
from Universal, Paramount, Warner Brothers, Sony Pictures and Fox in jointly announcing
the Disc-to-Digital Powered By Vudu program.

Through the service consumers will be able to bring their DVDs
into a Walmart store and pay a $2 or $5 fee per DVD (or eventually Blu-ray Disc)
to get access to a digital version of the movie through the UltraViolet Cloud locker system.

UltraViolet is a digital "proof of purchase" system that allows a
consumer to store a movie or TV title in a free, online personal library.

The DVD title will be made viewable to the owner on a wide range
of streaming products, from smartphones to set-top boxes, through Walmart's
online Vudu movie service.

Walmart's Aden said the chain is setting up merchandising kiosks in
stores to help educate consumers to the service and to assist them in authenticating
their existing or newly purchased DVD movies for access to a digital copy in
the Cloud.

 He said having a Walmart
employee hold the customer's hand through the process will encourage greater
awareness and participation using the UltraViolet technology.

Discs must be owned by the user and cannot be rented or borrowed.
Walmart will stamp the disc at the store to prevent other parties from using
the same disc for authentication purposes.

Disc owners may pay $2 for a standard-definition digital version,
or an HD version in the case of a Blu-ray Disc, or they can pay $5 to upgrade
from a standard-definition DVD to a high-definition digital version.

The titles will be accessible by a Vudu-enabled tablet,
smartphone, smart TV or Blu-ray player.

Walmart will have an exclusive on the in-store component of the
disc-to-digital conversion program using UltraViolet technology.

Samsung recently announced plans to market select Blu-ray Disc
players and HTiB systems that will have similar disc-to-digital authentication
capability through the player, using the Warner Bros. owned Flixster
application.

In the case of the Samsung devices, users purchase a Cloud-stored
standard or high-definition version of a DVD title. Once a digital version has
been purchased, it can be streamed through devices registered through the
disc-to-digital program.

The studios said thousands of DVD titles will be available
through the disc-to-digital program when it launches April 16.

Disc-to-digital technology will eventually be rolled out to
enable Blu-ray Disc authentication as well.

Studio representatives attending Walmart's press conference
called the retail giant's participation using Vudu a "big first step" in
building consumer acceptance for UltraViolet capability.

David Bishop, Sony Pictures Home Entertainment worldwide
president, said he believes Ultraviolet and the disc-to-digital component will "give
consumers confidence" in owning both physical discs as well and digital content
into the future.

To get the word to consumers, Ron Sanders, Warner Bros. Home Video
worldwide president, said that UltraViolet backers will be promoting the new
initiative through an advertising campaign with a budget comparable to the
launch of a major feature film.

But not all industry observers agreed that the disc-to-digital
would have the desired impact.

Dan Rayburn, executive VP of market analysis firm StreamingMedia,
said the studios are asking too much by requiring consumers to pay again for a
movie they already own.

"The studios are doing exactly what consumers don't want, which
is forcing them to pay multiple times for the same piece of content," Rayburn
said in a newsletter Tuesday. "The fact that consumers already spent money to
buy the DVD apparently is not good enough to allow them access to a free
digital copy, which they could easily get if they ripped the DVD on their own."

He added that asking consumers to pay again for movie is more likely
to drive them to obtain or make an illicit copy the title rather than visit a
Walmart store to pay for the privilege.

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