Warner Bros. flubs movie system launch

UltraViolet format confounds users

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Warner Bros. declined comment to the AP.

Mr. Greenstein, the Flixster CEO, later sent Mr. Parks an email, saying he was “incredibly sorry for the awful initial experience” and gave Mr. Parks free copies of two other movies.

UltraViolet is backed by Warner Bros. and four other major studios. It was supposed to allow a consumer to buy a movie once and almost magically have it be available on their TV, smartphone, tablet computer or any other device. This would all happen simply because the consumer’s ownership of the movie had been recorded online. Consumers would be able to share viewing privileges with family members in other locations, without having to buy a new copy.

But when Warner Bros. released home movies including “Horrible Bosses” and “Green Lantern,” UltraViolet didn’t work that way.

Warner Bros., a unit of Time Warner Inc., hadn’t completed deals with retailers such as Wal-Mart or with pay TV distributors including Comcast Corp. Such deals would have given consumers more places to access digital copies and streamed versions of their movies. Instead, users who wanted to watch movies had to go to Flixster.

Warner Bros. also didn’t have the backing of two heavyweights in the business, Apple Inc. and Amazon.com Inc., whose own systems for delivering digital movies aren’t compatible with UltraViolet, so the process wasn’t as seamless as intended.

The key issue is that the companies that would have to provide movie access, such as cable TV company Comcast, would bear the cost of online streaming in the way of increased traffic on its network, but wouldn’t collect money on the sale.

Some Hollywood executives are proposing that movie studios share about 3 percent of UltraViolet movie revenue to entice retail partners to participate.

Most studios appear committed to proceeding with UltraViolet. Sony launched its first UltraViolet-ready movies, “The Smurfs” and “Friends with Benefits,” last week. Universal released its first movie, “Cowboys & Aliens,” on UltraViolet on Tuesday. Both studios also offered streaming from websites they own along with access through Flixster. Viacom Inc.’s Paramount hasn’t yet committed to a date. (The Walt Disney Co. is pushing its own system of online ownership.)

Warner Bros. made downloads available for Apple and Android devices a month after launch, but the movies still require viewing within the Flixster app.

Comcast is expected to allow UltraViolet viewing through its Xfinity online service in the near future. Viewing through Comcast set-top boxes is not expected until 2013.

“We’re going to continue to learn over time,” says Mitch Singer, president of the Digital Entertainment Content Ecosystem, the movie industry and consumer electronics company consortium that created UltraViolet. “The experience will get better and better.”

Launching the system before the important winter holiday sales period was “the right thing to do,” says InkHouse’s Ms. Monaghan. But the studio should have let consumers know that improvements are on the way, she says.

Michael Solomon, a professor of marketing at Saint Joseph’s University, says Warner Bros. might have avoided the backlash if it dubbed its launch a “beta.” Then consumers would expect glitches while the company irons out the kinks.

“If they come out with the next version … they’ll have to work that much more to convince these people who have been burned once.”

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