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UltraViolet Called Digital Delivery 'Do-Over'

1/17/2011 12:01:00 AM Eastern

LAS VEGAS — A multi-industry coalition including Hollywood
studios, electronics manufacturers, retailers and video
providers, formally unveiled at International CES a virtual
content locker designed to simplify and consolidate
the purchase of video content for playback across multiple
devices.

The proposed system, called UltraViolet, is expected to
launch this summer and will enable the purchase of movies
and TV shows as a download for use on up to 12 devices
at any one time, and to be shared with up to six relatives
or friends.

Consumers will be required to register UltraViolet titles
they have purchased to make use of the sharing provisions.
Registered titles will be playable on up to 12 UltraVioletenabled
devices at one time, and old devices can be removed
as new ones are added.

An UltraViolet logo will be placed on compatible hardware
devices, content listings on retailer’s e-commerce
systems, and on DVD and Blu-ray packaging — signifying
that the purchaser of the disc also has the right to access
a digital version of the title in a vertical content locker administered
through UltraViolet account system infrastructure,
which was designed by Neustar.

The coalition, called the Digital Entertainment Content
Ecosystem (DECE), developed the Ultraviolet platform after
seeing shrinking home video sales and revenue in recent
years.

Consumer feedback indicated that people are buying
fewer movies and TV shows because they are frustrated
with and confused by their inability to use that content
flexibly across various devices and device brands. Studios
hope that a more flexible solution will both spark renewed
demand, and reduce piracy.

Speaking at a DECE press conference here Thursday,
Mitch Singer, Sony Pictures chief technology officer and
DECE president, called UltraViolet the result of a collective
industry “do-over” on digital distribution.

“Many industries that have rolled out in the past where
there has been a proprietary vertical platform have done
do-overs,” he said, citing everything from ATM cards to text
messaging systems. “Let’s figure out what the consumer
experience should look like if we had it to do all over again.”

Studios involved in the venture include Lionsgate, Paramount,
Sony Pictures, 20th Century Fox and Universal
Pictures.

Walt Disney Studios, which is working on a separate and
similar system called KeyChest, is not part of the group.

Data released Thursday by industry trade organization
Digital Entertainment Group showed that total revenue
from DVD, high-definition Blu-ray discs, and digital sales
and rentals declined 3 percent in the United States to
$18.8 billion in 2010.

Combined sales and rentals of Blu-ray discs, which
were up 53 percent in 2010, and digital downloads and
streaming, which grew 19 percent, were not enough to
overcome the 11 percent decline in DVD revenue to $14
billion, the DEG said.

At the same time, less-profitable rental revenue grew
2 percent to $7.8 billion as sales dropped 7 percent to
$11 billion.

Although few devices are expected to be UltraVioletready
when the system launches this summer, DECE members
expect products including smartphones, video game
consoles, tablets and computers to be upgraded to support
the platform in firmware and software downloads,
before devices integrating the capability are readily available
next year.

The DECE lists 46 other members, mostly from the technology
side of the industry, such as Best Buy, Comcast,
Samsung, Sony and Toshiba.

Noticeably absent from the list is Apple, which is a major
shareholder of Disney, the proponent of the rival KeyChest
platform.

The DECE announced earlier this month an evaluation
suite of technical specifications and a licensing program
that will allow companies to use the technical specifications,
interact with the UltraViolet Account infrastructure
via a suite of Application Programming Interfaces (APIs)
and use the UltraViolet logo for promotion and marketing
of UltraViolet content and devices.

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