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Good news for UltraViolet, Hollywood’s new cloud locker initiative: Some people actually like it, and are willing to pay to access UltraViolet streams and downloads. The bad news: Those people may not live in the U.S., and Hollywood doesn’t get to see any of their money. Access codes to UltraViolet movies have been showing up on eBay (s EBAY), and German online video blogger Bertram Gugel is reporting that he was able to buy one and access the title from his home country without any apparent geographic restrictions.
UltraViolet’s roll-out started earlier this month with two titles from Warner Bros. (s TWX) Consumers who buy The Green Lantern or Horrible Bosses on DVD or Blu-ray get a coupon to also access the movies as streams or downloads through Warner’s Flixster site. Some of these coupon codes have now been showing up on eBay, where they sell for around $1 to $2.
From Gugel’s blog post (original in German):
“The problem is that this establishes a price point for UltraViolet that’s far below what the studios are asking for… how is Warner ever going to sell digital copies of a movie for $10 if you can buy the same movie in the same quality and with the same features for $2 on eBay?”
Gugel also noticed that UltraViolet and Flixster don’t seem to have any of the geographic restrictions that are usually in place for services like Netflix. (s NFLX) The UltraViolet site informed him that this was a U.S.-only service, but he was still able to redeem the coupon code he purchased on eBay and then access the movie.
The absence of any geo-IP blocking could simply be lack of oversight; UltraViolet is still battling with a host of other problems, as early customers who actually bought the movies in question on physical discs are loudly complaining about lacking features and technical hiccups. UltraViolet’s website mentions the possibility that streams may be blocked for when consumers leave the country, and a spokesperson for DECE, the initiative behind UltraViolet, emailed me the following response:
“When consumers use already-downloaded files as part of their UltraViolet rights, they will be able to do so in any geography. Streaming availability may be subject to territorial restrictions if an account member is seeking to stream in a territory that is different from where the content was obtained. This possible restriction is not an UltraViolet-specific limitation, but rather a function of normal industry practices via which content distribution rights are often established on a territory-by-territory basis.”
Of course, geographic restrictions can easily be fixed. The trading of UltraViolet codes could be a bigger issue though, and impact the future of the service: UltraViolet is starting out with these codes to give buyers of physical discs some kind of portability. But eventually studios also want to use the locker service to get people to buy digital downloads of movies instead of renting them on iTunes. (s AAPL) A $2 code from eBay doesn’t make such an offering look all that attractive.