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Warner Bros. to buy Flixster in digital movie push
Question of the Day
With the deal announced Wednesday, Warner Bros. hopes to latch onto Flixster’s popularity to help it launch a system for storing movie purchases on distant servers known as the cloud. Such a system will let people watch movies they’ve bought on any device, regardless of the format.
The system, called UltraViolet, is set to launch in the U.S. this year as studios try to boost sales of digital movies to offset falling revenue from physical discs.
Thomas Gewecke, president of Warner Bros. Digital Distribution, said it will be important to give the digital movie plan a head start by having it promoted on a popular movie-search service _ the San Francisco-based Flixster.
“We think it creates a really interesting opportunity on a global basis to put information about movie ownership right at the fingertips of people when they’re thinking about movies, searching for movies and deciding what to do this weekend,” he said.
Although sales of Blu-ray discs are rising, the increases aren’t enough to make up for reductions in DVD revenue. Revenue from physical packaged home movies fell 20 percent in the first three months of the year to nearly $2.1 billion, according to the Digital Entertainment Group, a trade association. Meanwhile, revenue from digital downloads rose 10 percent to just $141 million.
People are hesitant to buy movies online because they fear they won’t be able to play them where they want _ either on the big screen in their living room or on mobile devices on the go. Transferring files between devices is a cumbersome task.
“It should be so convenient, so easy and so powerful to own a piece of content in the digital world, and today I don’t think it lives up to any of those adjectives,” said Flixster co-founder and CEO Joe Greenstein, who is staying on with about 60 other employees under Warner Bros.
UltraViolet has been in development for three years and is backed by major movie studios and technology companies. The Walt Disney Co. and Apple Inc. are holdouts, so iTunes movie purchases and Disney movies won’t be accessible, at least initially.
Participating companies include Time Warner Inc. and Viacom Inc.’s Paramount.
They plan to affix DVDs and Blu-ray discs with an UltraViolet logo to indicate that those purchases will be registered in the cloud. In theory, people could buy a disc, leave it in the shrink wrap, and then watch the movie through their home set-top box because the purchase had already been registered.
Although the studios want to launch UltraViolet this year, partnerships between studios, cable TV companies, electronics retailers and device makers have yet to be announced.
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