LONDON — Universal Pictures U.K., the British arm of NBC Universal’s home entertainment division Universal Pictures International, said Thursday that it will use Peter Jackson’s “King Kong” to launch a groundbreaking new broadband movie distribution service with U.K. rentals-by-post operator LOVEFiLM.
According to UPI president Peter Smith, the service — dubbed DTO or download-to-own — will debut April 10 with a choice of 35 films day-and-date with their DVD releases and will offer a triple play to tempt consumers. Uni’s top home video executive in the U.S. said the U.K. initiative is a harbinger of things to come in other regions in the near future.
In the U.K., at a price of £19.99 ($35) for such new releases as “King Kong” or “Nanny McPhee,” buyers will get two Windows Media Player downloads — one for their PC and one for their portable device — and a copy of the single-disc DVD sent to them by mail. Catalog titles will be offered at £9.99 ($17) or £14.99 ($26) depending on the film, but there is no model yet for a download-only sale, Smith said.
Describing it as a “revolutionary” initiative, he added that conditions now are right for film downloads. Computer penetration stands at 70% of U.K. homes, while broadband has reached 37% and is, according to analysts Screen Digest, set to top 60% (17 million homes) by 2008.
“The growth in broadband offers us a tremendous new distribution platform,” Smith said. “It will be a tremendous growth engine for our business.”
He declined to put a figure on the number of downloads that the service will achieve in its first year but said he believes it offers the potential to provide “sales like we have never seen before.”
Craig Kornblau, president of Universal Studios Home Entertainment, said Thursday the U.K. broadband movie distribution service is a model for what will one day be prevalent everywhere.
“I see it happening in the United States very, very quickly,” he said. “This is not a test, it’s happening. That is the future. People are going to be able to buy our movies online, and they’re going to be able to dowload them and send them to portables and play them on their PCs.”
Changing consumer habits are the driving force behind the U.K. venture, according to Universal Pictures U.K. chairman Eddie Cunningham.
“Consumers are becoming more demanding, they want higher-quality products, they want those products to be more accessible,” Cunningham said. “In our case, they want them anytime, anywhere. The days of just DVDs, which play on a television screen, are moving on. People want to be able to consume films on portable devices on train journeys and so on.”
Cunningham said research revealed that consumers still wanted a DVD copy. “It was a bit surprising to us, but people are saying that at this stage of the game, they would still like to receive a physical copy as well.”
Revenue will be split under the current DVD model, with Universal charging a standard wholesale price for each sale rather than any form of revenue sharing, Cunningham said.
UPI said it is keen to expand the model to other territories as soon as the infrastructure is in place. The U.K. service also will be available via www.aol.co.uk — which has a rental download service provided by LOVEFiLM, a unit of digital cinema provider Arts Alliance Media.
LOVEFiLM CEO Mark Livingstone said an average movie will take about 40 minutes to an hour to download in a 2MB broadband household, but that wait is expected to shrink rapidly.
“The important thing to note is that 2MB is going to become 4MB, 8MB, 16MB, 24MB, etc. We think it is no more than 12-18 months to the time when you will put the kettle on, get the kids ready to watch a great movie and you will be ready to go,” Livingstone said. “We are really at the point when this technology has become a reality, which is why we are so excited about it.”
The deal is nonexclusive, and Cunningham said that Universal is open to similar propositions with other retailers and platforms like Apple’s iTunes.
Livingstone also said he was keen to offer the service to Apple users but the chance to do so would depend on technological solutions from Microsoft and Apple. The move in part reflects the desire among rights-holders to more fully exploit their content libraries.
“On DVD at the moment, because of the limitations of shelf space, we make about 800 titles available out of a library, which has about 6,500 films in it,” Smith said. “This is a really exciting opportunity to make them available in due course.”
Article courtesy of Hollywod Reporter
