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Fox Offering Early Digital Access on New Titles, Cuts Out iTunes

Sections: Movies, Streaming, Video

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Digital HDFox has become the first studio to not only offer all new home video release up to four weeks early via its UltraViolet compatible DigitalHD program, but the first to also send “standard digital copy” into the cold dark night. Fox, along with the other major studios, has been selling digital versions early for a while now, usually for between $14 and 24.99 for major theatrical titles, in an effort to encourage digital ownership of movies, but this is the first time the ante has been upped this far. Sure to illicit some hate from Apple fans: Fox will no longer be supporting iTunes. Via Home Media Magazine:

“We been using [Digital HD] branding basically as a replacement for electronic sellthrough,” Marcais said. “Now we’re applying that branding to everything.”

The aggressive approach on pricing and windowing is apparently paying off, which Marcais believes will be driven further by upcoming home entertainment releases such as The Heat, Turbo, The Wolverine and The Internship, among others.

Indeed, since bowing movies early on Digital HD, Fox has seen a 400% uptick in ownership of digital content compared with higher-priced electronic sellthrough (EST) titles offered on street date, Marcais said.

Industrywide, EST grew more than 51% in the first quarter (ended March 31) to $231 million from $152.6 million during the previous-year period, according to data compiled by DEG: The Digital Entertainment Group.

To be sure, the numbers remain dwarfed by packaged media sellthrough, which topped $2 billion in Q1 revenue, and transactional video-on-demand, which approached $615 million

Ultimately, this move can be seen as the first salvo in a much larger war. Apple has always gone its own way, and dominates digital movie sales and the rental market pretty heavily. What Apple doesn’t do well, though, is play well with others. Its refusal to license FairPlay DRM likely lead to the creation of UltraViolet in the first place, and since the industry wants all its media to be inter-operable as we move toward digital distribution being the norm, getting everyone on the same page is very important.

By cutting off the flow of digital-copy redemption cash, Fox and the rest of the industry applies pressure to Apple to join the club. I think we’re looking at the end of disc-based digital copy in the next two or three years. UltraViolet is here and it works, and there’s little reason to spend the money encoding and preparing, and then pressing the DVDs  (and paying Apple the activation fee), when there’s an easier method that works, and has playback applications on every platform, including Apple. Once the Common File Format launches later this year, any device should be able to download UV content for local playback when the internet isn’t accessible. This removes the last obstacle to UV standing on an equal footing with iTunes in terms of usability.

Via: [Home Media Magazine]

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