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Hollywood’s Ultraviolet cloud initiative has registered only 1 million users to date and has been dogged by complaints that its technology is too cumbersome for consumers. Next week, the five major studios behind Ultraviolet will hold a press conference with Wal-Mart (NYSE: WMT) to detail their new partnership. Is this the lifeline the struggling movie-cloud venture has been looking for?
On Tuesday in Los Angeles Wal-Mart is expected to announce details about how it will serve UltraViolet and provide with the retail partnership it can’t live without. Backed by five of Hollywood’s six major studios — Disney (NYSE: DIS) remains the only holdout — UltraViolet was launched in October with hopes that would entice consumers away from low-margin rental streaming of movies and TV shows, as well as illegal torrenting, through a system of cloud-based distribution of digital entertainment. The essential pitch: buy a DVD, Blu-ray or electronic sell-through title from a participating major studio, and play it on up to 12 devices and share it with your family.
At the Consumer Electronics Show in January, Amazon (NSDQ: AMZN) announced UltraViolet retail support for Warner Bros. (NYSE: TWX) releases. But to date, the initiative has lacked a crucial retail touchpoint serving all the participating studios — a much-needed brick-and-mortar destination that can walk consumers through the tedium of cloud sign-up and solve a range of other problems. The Wall Street Journal reported last week that Wal-Mart was in talks to establish such a location within the photo-printing area of most, if not all, of its U.S. stores. The Journal also said that Wal-Mart will kick in much-needed retail promotional support in the form of a $30 million marketing campaign. Wal-Mart is also expected to provide details on how authentication of current disc libraries will be handled through UltraViolet.
At CES, Samsung showed off several new Blu-ray players with a “Disc to Digital” feature that would upload consumers’ existing DVD and Blu-ray titles to the UltraViolet cloud for a nominal fee. However, it’s believed that Wal-Mart will announce a service whereby legacy disc titles will have to be authenticated through its stores in order to be uploaded to the cloud. A Samsung representative did not respond to inquiries as to how the Disc to Digital would work with such a retail scheme.
Also expected to be announced: the inclusion of Wal-Mart’s Vudu online movie download and rental service into the UltraViolet portfolio. To date, UltraViolet has lacked a partner with the technological infrastructure to sell and serve movies to a wide range of devices. Vudu, the nation’s No. 3 online movie service, has app that plays on most devices and could solve many of those issues.