UltraViolet success depends on key holdouts

UltraVioletThe success of content ownership ecosystem UltraViolet will depend on the actions of those major studio, CE and online players who are currently holding out against UltraViolet, according to ABI Research.

By 2018, the firm expects active UltraViolet (UV) accounts (those with multiple movies) to exceed 65 million worldwide – up from the estimated 6 to 8 million at present and depending on the action from key holdouts, the base could reach as high as 108 million. Most UltraViolet accounts currently have one user; however, multiple users are supported per account and ABI Research expects multiple users per account as the system matures. The North American and European regions will continue to offer the most market potential for UV, but as retailers and content holders extend the business model from purchases (EST) to include rentals (TVoD) the opportunities should expand.

“After a shaky start UltraViolet is starting to pick up steam; however, several key players are not supporting the UV ecosystem,” comments senior analyst, Michael Inouye. “Apple, Disney, and Amazon remain the most notable holdouts in the US, but other ecosystem players like Microsoft could further fragment the market if they do not adopt UV support. As more users sign up, the pressures to support UV will certainly mount. While we expect the number of holdouts to decline, reaching universal support will prove an uphill battle.”

Long term continuity of a consumer’s digital library (for EST) is another key uncertainty that could diminish UV’s appeal, says ABI Research. Consumers are looking for access on all their devices as well as assurances they will not be forced to repurchase digital rights to content they thought they already owned. Practice director Sam Rosen adds: “While the move from physical media to electronic media for video content is underway, consumers continue to opt for subscription services and premium rentals rather than purchases. The ease of accessing and storing digital video libraries must approach that of digital music. If competing video libraries gain consumers’ trust without joining the UltraViolet ecosystem, many of the components of UltraViolet will help facilitate B2B commerce, but will fail from a consumer perspective.”

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