February 25, 2018
Movies Anywhere may well be the catalyst that finally ignites digital movie sales.
The digital movie sales and rights-locker storage service launched last October with support from five of the six major studios, four of the biggest online retailers, and an opening library of more than 7,300 movies.
Two months later, at the January CES in Las Vegas, GM Karin Gilford proudly announced that consumers’ accounts have accumulated nearly 80 million movies.
More than one astute industry observer has noted that Movies Anywhere could be a game changer for electronic sellthrough (EST), the spark that will light the fuse on movie sales over the Internet becoming a big, big business.
And this is why Movies Anywhere is one of two honorees in the inaugural Media Play Fast Forward Awards, honoring people, technologies, organizations, products or services that move the home entertainment industry forward.
The awards are an outgrowth of the Home Entertainment Visionary Awards, which were launched in 2002 by the now-defunct Home Media Magazine. Comcast’s Brian Roberts was the 2017 honoree. Warren Lieberfarb, the father of DVD, was the first, back in 2002. Other honorees have included Sony Pictures’ Ben Feingold, Samsung’s Tim Baxter, and Walmart’s Louis Greth and Chris Nagelson.
In an interview with Media Play News, Gilford states, “It’s doing great. Consumers are using and enjoying the product and we continue to see it grow. We’re really happy with its performance to date, and I feel like 2018 is going to be an exciting year for the product.”
Gilford’s glee is understandable. In an industry where hype often exceeds reality, Movies Anywhere just might be one of the rare exceptions.
The coalition behind Movies Anywhere is one reason. The service launched with support from digital retailers Amazon Video, Google Play, iTunes and Walmart-owned Vudu, with movies from Disney (including Pixar, Marvel Studios and Lucasfilm), Sony Pictures, 20th Century Fox Film, Universal Pictures and Warner Bros.
“It’s great to have so many of the major studios and digital retailers participating in a shared entitlement system, which fulfills the promise of making digital ownership easier and more accessible to consumers,” says Jim Wuthrich, president of the Americas and global strategy for Warner Bros. Home Entertainment. “Because of its wide availability and ease of use, Movies Anywhere has quickly and successfully been adopted by consumers and we look forward to the system’s continued growth.”
Ease of use, as Wuthrich notes, is another reason for Movies Anywhere’s success. The service is centered on an app, which takes consumers to a simple and visually appealing interface that lets them buy movies — or redeem codes included with Blu-ray Discs — with the touch of a finger.
Purchased films pop up instantly, and, stored in the cloud, are available for immediate viewing on any connected platform, from the phone to the home TV. Movies can also be downloaded for offline viewing when there is no Internet connection available.
“Movies Anywhere is an important evolution in the EST marketplace that makes it easier for consumers to purchase, manage and enjoy movies online,” says Mark Fisher, president of the Entertainment Merchants Association (EMA). “It simplifies the EST process to make it more like purchasing a disc. If a consumer wants to purchase a DVD or a Blu-ray Disc, they can choose from a multitude of retailers and know that the disc will play on any authorized player for the format.
“Up to now, EST has been more challenging than that. By making the EST experience more consumer friendly, Movies Anywhere promises to be the vehicle to increase EST utilization and promote greater ownership and collections of digital content. And its impact will increase as more studios and retailers participate.”
Over the past four months, Gilford says, Movies Anywhere has been refined through close monitoring of consumer feedback.
“We are lucky, in this day and age, to have so many great tools to listen to customers,” Gilford says. “From social media to app reviews — love them or hate them, they are a great way to get feedback from our customers.”
Acting on this feedback — promptly and efficiently — is critical, Gilford says.
“We’ve set up a system where our tech team gets an alert every time someone reviews the app, so we are able to tighten the circle between feedback and response time,” she says. “One small but important thing we heard back from our customers was the need for better communication about what studios are supporting our product, so now we have that information right at the bottom of the library where you make those transfers. We’re letting them know what studios aren’t in, so they aren’t hollering about something being broken; we’re communicating with them before that frustration level sets in.”
Gilford says her team is also starting to look more at library management.
“We’re adding more ways to sort movies so as people build their digital collections they are also better able to organize them. We’re employing crawl-walk-run: We’re experimenting with the ability not just to organize by genre, but also by franchises, or even what they might like to watch next.
“The best ideas come from the user base, and we want to be in a position where we can respond to suggestions and fill those needs.”
Executives at Movies Anywhere’s studio partners are eager to watch the service grow and evolve — and are hopeful for its impact on digital movie sales.
“Audience expectations for content experiences are evolving rapidly,” says Keith Feldman, president of 20th Century Fox Home Entertainment. “Movie fans are passionate and engaged, and they’re demanding great quality, scope and originality, with all their favorite movies available on demand.”
“Movies Anywhere is a huge win for the consumer, providing them with more freedom, flexibility and utility, and their digital library can now be viewed through a range of devices and digital retailers, anytime and anywhere,” adds Janice Marinelli, president of Disney/ABC Home Entertainment & Television Distribution, for The Walt Disney Studios. “The strength of the studios and digital retailers that have come together at launch is unprecedented.”
Jason Spivak, EVP of worldwide digital distribution and North America at Sony Pictures Home Entertainment, agrees. “Movies Anywhere marks a great step forward for consumers to collect and enjoy digital movies,” he says. ”We are so pleased to be working with our retail partners to make it a reality.”
Michael Bonner, EVP of digital distribution for Universal Pictures Home Entertainment, notes that “digital sellthrough has been growing year over year, and we continue to see increased consumer engagement in the category. Movies Anywhere is just the latest example of studios and distributors working together to provide more value to the consumer and setting a new bar for digital movie ownership.”
Building a digital movie sales business hasn’t been easy, as any studio executive will candidly concede. When you’re going up against Netflix, with its enticing all-you-can-watch menu for just 10 bucks a month, it’s hard to get people to pony up even more than that for a single movie.
But selling movies and other filmed content to consumers has always been Hollywood’s holy grail, dating back 40 years to the birth of home video. Studios initially intended only to sell movies on videocassette to the public. But they were undercut by a veritable army of “rentailers” who sprang up seemingly overnight and, under the protection of the First Sale Doctrine to federal copyright law, began renting movies to consumers for as little as a buck a night. The sales business didn’t stand a chance.
It took the studios more than 20 years to finally get a viable sales model in place — the DVD, which was launched in 1997 and within a few years became the most successful consumer electronics product launch in history.
But then came Netflix, and the sales model once again took a hit — particularly after Netflix in 2007 introduced subscription streaming. Year after year, disc sales plummeted as consumers planted themselves on their sofas for a nightly steam of at first ‘B’ movies and then an increasingly compelling menu of original programming.
By 2017, according to DEG: The Digital Entertainment Group, annual consumer spending on discs had fallen to $4.7 billion, down from $8.5 billion just five years earlier. Consumer spending on streaming, meanwhile, had mushroomed to $9.5 billion, up from $2.3 billion in 2012.
In an attempt to recapture some of these lost sales dollars, studios began selling movies digitally, but it was a hard sell.
To encourage consumers to make the digital transition, the studios in October 2011 launched UltraViolet, a digital movie storage locker that was supposed to streamline the purchase process. The service was supported by all the major studios except Disney, which two years earlier, at the January 2010 CES, had announced its own technology, KeyChest, to enable consumers to buy films or television shows from various distributors, access them from the cloud, and play them on multiple platforms ranging from TVs to computers and phones. According to a Reuters story at the time, Disney “also said a third-party company will operate KeyChest, and that it expects other studios to make their content available through the authenticating technology Disney has developed.”
The other studios never did. Instead, they banded together with various consumer electronics and tech firms to form the Digital Entertainment Content Ecosystem (DECE), which ultimately developed a competing concept, UltraViolet.
To further boost the appeal of EST, studios — led by 20th Century Fox — adopted a sexier name for the format, Digital HD, and began releasing movies digitally several weeks before they came out on disc.
Initial gains were impressive, with digital movie sales posting annual growth rates in the double digits. But UltraViolet’s promise as the great unifier never materialized, hit on one end by the conspicuous absence of Disney and retailers such as iTunes and Amazon, and on the other by its own complexity (individual studio portals, multiple passwords) and clunky technology.
In February 2014, Disney launched its own digital movie service, Disney Movies Anywhere, built on KeyChest technology, and made deals for retail access from the likes of iTunes, Amazon, Vudu and Google Play. And as digital movie sales growth once again slowed to the single digits, there was grudging consensus that Disney might have had the right idea all along.
And so it was that studios quietly agreed among themselves to give the Disney Movies Anywhere platform a try. As Gilford recalls, “When I joined Movies Anywhere in mid-January 2017, we were forming the core team. We had to quickly hire the full stack of engineers and designers who would power Movies Anywhere. We were lucky to have a head start by utilizing the KeyChest platform, but really the app, the website — that all accelerated around the time I started and led up to the launch.
“I’ve never worked with a more passionate, focused and top-notch team. Anyone who understands technology, even at a cursory level, and looks at what was accomplished with five studios, four retailers, on nine platforms in nine months, knows how remarkable this is.”
Coming from Gilford, that’s saying a lot. Before coming on board at Movies Anywhere in January 2017, she spent seven years as SVP of digital media at the Disney ABC Television Group. Before that she was SVP of Fancast and online entertainment for Comcast Interactive Media (CIM), a division of Comcast Corp. There, she oversaw CIM’s online video and entertainment site, Fancast.com, and was also charged with pursuing other opportunities in the online entertainment space.
Before joining CIM in 2008, Gilford worked for eight years at Yahoo!, most recently as VP and GM of Yahoo! Entertainment, where she led all programming, content and business strategy for entertainment consumer websites Yahoo! Movies, Yahoo! Music, Yahoo! TV, omg!, Shine and Yahoo! Games. Prior to Yahoo!, Gilford held business development and finance positions at Paramount Pictures International Television, working full time while pursuing an MBA at the University of Southern California’s Marshall School of Business. She began her career at Ernst & Young LLP, one of the “Big Four” accounting firms.
Now that Movies Anywhere is 4 months old and the proverbial kinks have been ironed out, Gilford says, the focus is split between improving the user experience through sorting and other functions and boosting Movies Anywhere’s profile.
In addition to its own paid media campaign, Gilford says, “We’re getting amazing support from our studio partners. Most big home entertainment releases are now tagged with Movies Anywhere on the advertising creative, and if you go into a store you’ll see we’re on-pack with all physical product from our five studio partners. So we’re driving consumers in on most of their touchpoints.”
The Movies Anywhere team is also planning more programs, promotions and special offers, and has extended its launch promotion of five free movies for connecting to at least two retailers.
Also high on the agenda is bringing more content owners on board, particularly Paramount Pictures, the sole major-studio holdout, and Lionsgate.
“I’ve been in digital for a long time,” Gilford says. “It’s exciting to watch how the pace has evolved. We can build use cases for everybody, for every segment of the population that enjoys and buys feature films. Developing technology for all consumers is a challenge, but with Movies Anywhere I think we really nailed it. We took aim at the mass audience, regardless of equipment, regardless of how tech-savvy they are. You don’t have to have the latest device — no matter what technology you have in your home we want to be there for consumers.
“There shouldn’t be a lot of hassle or friction involved, when all you want to do is kick back and watch a great movie.”