Can Clouds Convince Americans to Buy Streaming Movies?

Attention, home video viewers: Hollywood has noticed you’re not buying as many movies lately, and that not even the introduction of Blu-ray has slowed the slump. Now, the industry is hoping that the advent of cloud storage will get you to buy movies again, using streaming video. (Yes, you’re already accustomed to using streaming video to rent movies, but the studios want you to buy as well.) As such, say hello to two new rival cloud services — UltraViolet, launching this week with the home video releases of ‘Green Lantern’ and ‘Horrible Bosses,’ and Apple’s yet-unnamed movie service, launching soon — designed to hopefully change your movie-buying behavior. Both services offer you the option of watching your movie on a variety of devices, wherever you happen to be, but can Hollywood use the convenience of cloud storage and streaming to get you to spend more on what you’re already getting?

UltraViolet, which is a partnership among all the major studios except Disney, works this way: if you buy a Blu-ray or DVD that has the UltraViolet logo on the package (right photo), you are entitled to a digital copy residing in the cloud, which you can stream on any Web device, be it a computer, a smartphone, a tablet, or an Internet-enabled TV. In other words, it’s like the digital file you’re used to getting with some DVDs, only it’s not on your hard drive and you can play it on any machine.”We want to emphasize the concept of ‘buy once, play anywhere,'” Warner Bros president of digital distribution Thomas Gewecke said in a statement.

Apple’s service, which doesn’t yet have a formal name or launch date, is expected to work this way: you’d buy the movie online through the iTunes store, and you’d be able to stream it on any Apple device. According to the Los Angeles Times, the service should be up and running by late 2011 or early 2012.

There are some caveats, of course. Right now, you can’t buy UltraViolet streaming movies without buying a disc. In fact, if you want to stream ‘Green Lantern,’ you can’t even buy the mere single-disc DVD; you have to buy either the Blu-ray combo pack (retailing for $ 35.99) or the Blu-ray 3D combo pack ($ 40.99). And even though you’re buying a high-definition version of the movie on disc, the streaming copy is not hi-def (or 3D, for that matter).

Also, you have to jump through some hoops to use it: there’s an online UltraViolet code that you must enter to claim your copy; to play it, you have to set up an account with a service like Flixster (the movie-themed social networking site owned by Warner Bros., one of the four UltraViolet studios).

As for Apple’s service, it will work only on Apple’s own mobile devices and Internet-TV boxes. Users of non-Apple smartphones, or set-top boxes like Roku are out of luck. And it’s not even clear when Apple users will be able to access the service. The new iOS5 operating system for Apple mobile devices, introduced Wednesday, allows cloud storage of music, photos, and some other media, but not movies — yet.

Some of those difficulties will be ironed out in the future. In 2012, UltraViolet will start selling streaming copies alone, without having to buy a physical copy as well.

Still, questions remain. What will Disney do? Will it side with Apple or UltraViolet? Or both? Will the two services undercut each other? According to the Times, studio executives think not; in fact, they welcome Apple’s entry into the streaming-movie market, on the theory that iTunes can get people in the habit of buying cloud movies the way it got consumers acclimated to buying music downloads, and that behavioral shift will benefit all the studios.

But will viewers change their behavior? Right now, you’re going to spend more to own a streaming movie than you will to subscribe to an entire library (like Netflix’s) for two months. And UltraViolet certainly isn’t as easy to use (yet) as Netflix.

More broadly speaking, are streaming users and DVD/Blu-ray users the same people? At the risk of overgeneralizing, disc fans like the storage medium’s picture quality, its bonus features, and the ability to replay a movie an unlimited number of times. Streaming users prefer digital’s convenience and portability, don’t mind watching a movie on a three-inch screen, don’t need extras, and are accustomed to watching a movie only once. The studio’s cloud strategy depends on getting both groups to change the way they watch movies. So far, it’s not clear whether either UltraViolet or Apple offers a compelling enough set of enticements to make viewers change.

Nonetheless, it’s been clear for some time that Hollywood doesn’t really want to be in the disc business anymore. It still wants you to buy movies, but it doesn’t want to spend money producing and shipping the physical product. Eventually, streaming may become the primary — or even the only — delivery system for private movie viewing. So the question becomes not “Can viewers learn to start loving streaming?” but rather, “Do we have to start loving it now?”

[Photo Credit: Warner Bros.]