A consortium of Hollywood studios and technology companies will discuss Thursday at the Consumer Electronics Show (CES) plans to launch an initiative called Ultraviolet that's intended to jumpstart the nascent business of selling films and television shows on the Internet.
After more than four years in the works, Ultraviolet will launch by the middle of this year, with participating retailers and studios allowing consumers to purchase digital copies of movies that can be stored online or transferred between devices without an added cost.
It's the first time that Ultraviolet, backed by every major Hollywood studio except Walt Disney Studios, and a number of consumer electronics companies and retailers that sell entertainment products, with the notable exception of Apple Inc., has detailed plans to put its technology in the hands of consumers.
Disney has it own similar, competing technology initiative called Keychest. Apple, whose CEO, Steve Jobs, is Disney's largest individual shareholder, rarely takes part in cross-industry consortiums, instead pursuing its own strategy.
People who buy content from Ultraviolet digital retailers, which include Best Buy, Comcast, Microsoft, Panasonic, Sony and Toshiba, will be able to share it with up to six friends or family members, transfer or stream the movie on up to 12 devices and create copies on DVDs and portable flash drives. It's intended to alleviate one of the major impediments to the sales of digital copies of movies: that files are typically limited to a single device and thus are less usable than a DVD.
"The most highly skilled users are already downloading content, making copies and watching on any device they want," said Mitch Singer, the chief technology officer of Sony Pictures, who has been the key executive behind Ultraviolet. "We're trying to build a business model for everyone around that behavior."
Consumers were expected to rent 37.7 million movies by way of the Internet last year, according to Screen Digest, nearly double the number they purchased. Studios generate much bigger profits from sales than rentals, however, and are hoping to encourage consumers to buy more as the market transitions from physical media to digital, particularly because sales of DVDs have plummeted in recent years.
Though studios will decide where and how to sell their content with Ultraviolet technology and retailers will set prices, Singer said consumers will be able to buy digital copies of movies and TV shows by way of computers, Internet-connected televisions, and also along with Blu-ray discs.
Based on research the consortium collected, Singer said most consumers value a digital copy of a movie at $11 or $12, less than the typical $15 to $20 price of a DVD.
When Ultraviolet first launches this summer, there may not be many devices compatible with its file-transfer technology. But Singer said later in the year many phones, video-game consoles, tablets and computers would start getting software upgrades to make them work with it. In 2012, devices with built-in Ultraviolet will start to be sold.
However, unless and until Apple decides to join Ultraviolet, its popular iPod, iPad and Apple TV will make for notable absences from the technology's "ecosystem."
Singer said he's optimistic that Apple will open up to Ultraviolet, noting that the company has allowed access to Netflix's video streaming service on its devices.
After a long time spent recruiting participating companies and creating the technology that makes Ultraviolet possible, Singer said he's relieved that this year the question of how and where consumers can get it will not be his responsibility.
"What we're announcing at CES is that we're now open for business," he said. "This is our handoff to the retail guys saying, 'OK, it's up to you now.' "
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