Disney's Entry Into The Online Movie Biz

Walt Disney has started an online movie service,Disney Movies Anywhere,  that allows consumers to connect and store previously bought movies to Apple’s iTunes. The movies can then be played on iPads, iPhones or iPodTouch devices.

This is Disney’s version of the movie industry’s Ultraviolet initiative, which Disney and Apple have avoided. Ultraviolet, which lets consumers store movie purchases in a cloud-based library, has partnered with retailers like Walmart and Barnes & Noble.

Disney and other movie companies are attempting to regain dollars lost from the DVD entertainment business, which has been steadily declining since 2001. Total home video entertainment revenues are now at $18.2 billion, with sales of DVD/Blu-ray discs dropping 8% year-over-year to $7.8 billion. Meanwhile, subscription video on demand (SVOD) services continue to have rapid growth, with sales now at $3.16 billion.



Fresh Disney titles like  “Frozen” will be immediately available on Disney Movies Anywhere. The service won’t overlap with SVOD players like Netflix, whose inventory is still mostly older titles.

While Disney gets some key revenue from Netflix, analysts believe it needs stronger revenue from fresher (and higher-priced) digital titles. Disney Movies Anywhere launches with more than 400 titles spanning the Disney, Pixar and Marvel libraries.

Disney and Apple have had a long history, ushering in the premium digital TV/video age back in 2005 when Disney’s ABC-TV shows were offered through the iTunes store.

Unlike with Netflix, ownership is encouraged; Disney Movies Anywhere titles can be either streamed or downloaded.  Disney’s marketing will need to convey that clearly in addition to letting consumers know that fresher movies are available than with other services.

But can consumers really “own” their movies with services like Disney Movies Anywhere and Ultraviolet?  Not exactly, at least with Ultraviolet, where customers can’t loan a downloaded movie to friends.

Since starting in October 2011, consumers have registered 12 million Ultraviolet accounts. Does that sound like a success when there are over 290 million U.S. TV viewers and some 114 million TV homes?

From Disney’s perspective, after sitting on the sidelines for two and half years, it probably can’t do much worse.

For consumers? At the moment, it seems they have a little more window-shopping to do.

Next story loading loading..