By Ryan Nakashima, Business Writer
LOS ANGELES (AP) --A group of media and electronics companies will soon start testing a system that will let you watch the movies you buy wherever you are, regardless of formats and other technical hurdles. Like ATMs, your account would follow you, no matter what brand of machine you use.
The group has also come up with a name for the open standard it is creating, which it unveiled Tuesday (7/20): UltraViolet.
The open standard backed by movie studios including Warner Bros. and technology companies such as Microsoft Corp. represents a challenge to proprietary formats from Apple Inc. and others. Those formats lock buyers of video content to limited numbers of devices, such as the iPad or Apple TV.
Backers of the Digital Entertainment Content Ecosystem hope to kickstart growth of digital movie purchases, now just 4 percent of all sales, by freeing consumers of format concerns.
That would mirror the way that the use of automated teller machines exploded once all banks cooperated in processing transactions, said Mitch Singer, the chief technology officer for Sony Pictures Entertainment and president of the consortium, the Digital Entertainment Content Ecosystem.
The concept is to create a digital locker that stores tokens that are proofs of purchase of DVDs, Blu-ray discs and movie downloads. When a consumer buys a movie online or at a store, he can watch it anywhere else, including on any mobile device or TV set without the hassle of copying his personal files.
The UltraViolet brand is meant to evoke the platform’s invisible presence, and transcendence across numerous devices.
“It’s outside the visible spectrum, but it’s all around you and it’s ubiquitous,” Singer said.
Specifications for a proposed common file format will be released soon, and testing of the system with an unnamed retailer will begin by the end of the year, Singer said.
Although the consortium contains a broad swath of companies including Toshiba Corp., Best Buy Co. Inc. and Netflix Inc., it does not include Apple Inc., or The Walt Disney Co.
Disney is attempting to come up with its own digital locker system called “KeyChest” that seeks to accomplish roughly the same thing. Apple representatives declined to comment.
Movie studios are pushing the benefits of being able to buy movies once for use on any device to offset the decline in DVD sales.
U.S. spending on all home video products, including discs, downloads and rentals, fell 5 percent to $20 billion in 2009, dragged down by a $2 billion decline in DVD spending to $16.4 billion, according to industry association The Digital Entertainment Group.
Spending on digital downloads, video-on-demand rentals and Blu-ray discs grew by about $1.1 billion combined to $3.6 billion, not enough to make up for the DVD decline.
One hurdle facing the digital locker concept is that the retailer collecting money on the sale may not be the one that bears the cost of delivering the movie over set-top boxes or the Internet.
So far, the necessary web of deals allowing for that complex transaction has not been set up.
Mark Coblitz, senior vice president at group member Comcast Corp., said his company has not decided how it might develop a business using digital tokens.
Comcast could sell UltraViolet-compatible movies through its Fancast video website, or deliver movies that customers have purchased elsewhere over Comcast set-top boxes. Either method could involve complex sharing of costs and revenues.
But no matter the business model, Coblitz said giving customers a way to access their movie libraries anywhere could make a Comcast cable subscription more worthwhile.
“It really adds a lot of value to being a customer of Comcast,” he said.
Google Opens Its Defense In Antitrust Case Alleging Monopoly Over Online Ad Technology
Google opened its defense against allegations that it holds an illegal monopoly on online advertising technology Friday with witness testimony saying the industry is vastly more complex and competitive than portrayed by the federal government.
"The industry has been exceptionally fluid over the last 18 years," said Scott Sheffer, a vice president for global partnerships at Google, the company's first witness at its antitrust trial in federal court in Alexandria.
The Justice Department and a coalition of states contend that Google built and maintained an illegal monopoly over the technology that facilitates the buying and selling of online ads seen by consumers.
Google counters that the government's case improperly focuses on a narrow type of online ads — essentially the rectangular ones that appear on the top and on the right-hand side of a webpage. In its opening statement, Google's lawyers said the Supreme Court has warned judges against taking action when dealing with rapidly emerging technology like what Sheffer described because of the risk of error or unintended consequences.
Google says defining the market so narrowly ignores the competition it faces from social media companies, Amazon, streaming TV providers and others who offer advertisers the means to reach online consumers.
Justice Department lawyers called witnesses to testify for two weeks before resting their case Friday afternoon, detailing the ways that automated ad exchanges conduct auctions in a matter of milliseconds to determine which ads are placed in front of which consumers and how much they cost.
The department contends the auctions are finessed in subtle ways that benefit Google to the exclusion of would-be competitors and in ways that prevent... Read More