Wednesday, October 21, 2009

Disney Touts: Ditch the DVD

Walt Disney Co. is close to unveiling technology that it says will enable entertainment companies to adapt their business models to a new reality in which consumers increasingly rely on computers and cell phones in place of DVD players and TVs.

Not only cellphones as a viewing platform, I hope.

The technology, code-named Keychest, could contribute to a shift in what it means for a consumer to own a movie or a TV show, by redefining ownership as access rights, not physical possession.

The technology would allow consumers to pay a single price for permanent access to a movie or TV show across multiple digital platforms and devices—from the Web, to mobile gadgets like iPhones and cable services that allow on-demand viewing. It could also facilitate other services such as online movie subscriptions.

No more scratched discs, cracked cases, or forgotten items. But server capacity and broadband throughput will have to be quite robust.

Keychest aims to address two of the biggest hurdles blocking widespread consumer adoption of movie downloads: the difficulty of playing a movie back on devices other than a PC or laptop, and limited storage space on those computers' hard drives. As such, Keychest could put Disney on a collision course with an initiative, known as the Digital Entertainment Content Ecosystem, or DECE, that has similar goals.

Keychest uses the same "cloud computing" logic that underlies Web-based applications, such as Google Docs, permitting users to store files and photographs on remote Internet servers and access them from anywhere, rather than keeping them on their own computers.

I use Google apps, and like the ubiquitous accessibility.

As an aside, I looked up the word ubiquitous, and saw this term: Ubiquitous computing (ubicomp) is a post-desktop model of human-computer interaction in which information processing has been thoroughly integrated into everyday objects and activities. In the course of ordinary activities, someone "using" ubiquitous computing engages many computational devices and systems simultaneously, and may not necessarily even be aware that they are doing so. This model is usually considered an advancement from the desktop paradigm.

The rollout of the new technology comes at a critical juncture for the movie industry. DVD sales, once a financial mainstay for Hollywood, have fallen as much as 25% at some studios. The decline in DVD revenue has undermined the business model Hollywood has relied on for more than a decade.

DVDs can be awful, but I imagine that mobile computing has had a very significant impact on DVD sales.

Bob Chapek, president of home entertainment at Disney Studios, says the company doesn't expect Keychest to deliver tangible financial results for five years. But he predicts that in combination with Blu-ray, digital distribution "should bring our category back up to a healthy state where we can expect growth in the future." The company declined to name other companies that may have agreed to participate. Apple Chief Executive Steve Jobs is Disney's largest shareholder, and people in the entertainment industry say it would be reasonable to infer that Apple would cooperate with such an initiative.

Aside from controlling Apple, Jobs is also Disney's largest shareholder, courtesy of his sale of Pixar to Disney some years ago.

Keychest and DECE are competing for the same market; DECE is accepted by 5 major studios, as well as Comcast and Intel. Interesting idea; tiome will tell.

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