Disney Throws Open the Gates to Its Own Digital Movie Service
Once fully deployed, the free service, called Disney Movies Anywhere, will allow consumers to buy a Disney, Marvel or Pixar movie once and watch it on any web-ready TV, mobile device or computer. Users on Tuesday were immediately able to link their Apple iTunes accounts with the Disney Movies Anywhere website and app.
The arrival of Disney Movies Anywhere has been long delayed. Two years ago the company declined to participate in a digital movie storage and management system called UltraViolet , even though every other major film studio signed on. At the time, Disney was concerned that the name was confusing and worried that families — Disney’s core consumers — were not yet ready to embrace cloud storage technology. The company, always mindful of tightly controlling how its products are presented, also felt its brand was strong enough to go it alone.
Disney also wanted to enter the cloud-based market in lock step with Apple. UltraViolet has partnerships with major digital movie retailers like Best Buy and Walmart, but lacks a direct tie to iTunes, which controls roughly 60 percent of digital movie purchases.
Disney and Apple have had close ties since Robert A. Iger took over as chief executive of the entertainment conglomerate in 2005. Shortly after, Disney became the first studio to make its movies and TV shows available on iTunes. Apple’s founder, Steven P. Jobs, sold Pixar to Disney in 2006 and served on the Disney board until his death; his widow, Laurene Powell Jobs, remains Disney’s largest shareholder. Mr. Iger joined Apple’s board in 2011.
Hollywood urgently wants consumers to form digital movie libraries, the modern-day equivalent of rec room shelves lined with DVDs. The reason is that selling a digital movie is three times more profitable for studios than renting one out. Studios see ownership as a way to return their home entertainment divisions, battered by the decline of DVD sales, to growth.
Spending on digital purchases of movies and TV shows (as opposed to digital rentals) surged 47 percent last year, to $1.19 billion, according to the Digital Entertainment Group, an industry consortium. Digital copies of movies typically sell for $15.
To stoke sales, studios have started to routinely make new movies available for digital purchase two weeks before selling them on DVD and Blu-ray discs. The arrival of Disney Movies Anywhere may help strengthen the market even more.
“Once you start to get the family business going, you have Mom involved,” Mike Dunn, president of 20th Century Fox Home Entertainment, told Variety last month as part of a report on UltraViolet. “That’s historically been the critical gatekeeper and driver of major purchases for libraries.”
The arrival of Disney Movies Anywhere coincides with the digital release of “Frozen,” which has taken in more than $980 million at the global box office. For a limited time, Disney will give a digital copy of “The Incredibles” to people who activate Disney Movies Anywhere and link to their iTunes account.
In a statement, Alan Bergman, president of Walt Disney Studios, promoted Disney Movies Anywhere as an “exceptional consumer experience.” Jamie Voris, the studio’s chief technology officer, added that “the intuitive layout of the website and app creates an easy and enjoyable browsing environment.”
Analysts responded favorably to the announcement. “Disney Movies Anywhere could stabilize Disney’s home entertainment business, which has experienced lower results for five consecutive years,” Drew Crum, an analyst with Stifel Nicolaus, wrote in a report.
To begin using the service, consumers download an app or visit the Disney Movies Anywhere website . Users can then import Disney, Pixar and Marvel films from their iTunes accounts; people who have purchased select Disney, Pixar and Marvel DVDs can type in a code provided on the packaging to claim digital rights to those films.
Disney did not say when the service would be compatible with Android-based mobile devices, although a spokesman said the company was in “active negotiations” with other technology partners. Lucasfilm, a Disney unit, is likely to join the service next year, with the release of a new “Star Wars” movie.
