Content Execs at TheGrill Warn: Move Aside, Netflix — Movies Are Going Into the Cloud

Three industry executives show how promoting and monetizing content ownership is key to the industry's future — and explain UltraViolet

In this digitized world of renting, streaming and downloading, three executives from major content creators agreed on at least one remedy – monetizing ownership.

That is why Sony’s John Calkins, Warner Bros.’ Thomas Gewecke and CBS’ Jim Lanzone took the stage on Tuesday at TheGrill, TheWrap’s annual media conference, to discuss, among other subjects, Ultraviolet, the cloud-based home- entertainment system.

(Photograph by Jonathan Alcorn)

“This is the first step in making ownership a stronger proposition for consumers,” said Gewecke, president of Warner Bros. Digital Distribution. “Historically, they have had a good experience buying DVDs and Blu-ray. Going forward what consumers want in addition is the ability to access content in the cloud.”

UltraViolet will let consumers buy a digital copy of a movie at a standard retailer and upload it to the cloud, making it available whenever they want to watch it.

Also Read: SoundCloud's Ljung at TheGrill: Sound Could Be Bigger Than Video on the Web

The major studios are trying to get a handle on the market for their content by spearheading the program — though Disney did not sign on.

All three executives, speaking with TheWrap’s founder and editor-in-chief Sharon Waxman, agreed that while DVDs and Blu-rays are key to the home entertainment business, UltraViolet presents an important opportunity to advance content ownership. This is especially significant when people can just stream those same movies or TV shows online. 

“The challenge is how do you make ownership more valuable in a digital world,” said Gewecke. “In a world where there’s lots of streaming, ownership has to be more than repeatability.”

(In the below clip, Gewecke explains the benefits of keeping your head — and your media — in the cloud.)

Reply Reply to all Forward Invite Frank Anderson to chat Video Presence – HD Video Conferencing Solutions. AD Nationwide Video Experts since 1986 www.vsgi.com They believe the answer is in the cloud, which is why Sony announced Tuesday that it was releasing its first two titles for Ultraviolet – “The Smurfs” and “Friends with Benefits.”

Also Read: 'Friends With Benefits,' 'The Smurfs' Will Be Sony's First UltraViolet Titles

As Calkins, EVP of Global Digital an Commercial Innovation at Sony Pictures Home Entertainment, explained, UltraViolet not only offers the opportunity for repeated viewing but also a “degree of portability and multiple device interactivity you don’t get” when using something like video-on-demand.

While consumer ownership is the focus of this still developing industry initiative, studio ownership is where the discussion began.

What about Hulu, the online streaming and subscription service owned by a consortium of major studios?

Though it is for sale — and owned by companies that rival those of the speakers’ — no one seemed willing to guess who would step up to buy it. Only Lazone, president of CBS Interactive, really touched the topic, explaining why CBS wanted no part of it.

Again it came down to one word – ownership. “We believe in controlling our own destiny and being in control of our own content,” Lazone said.

While the other sites have given a lot of their content to Hulu, CBS has kept it all on its own site.

“There’s a reason CBS has been the #1-ranked network website for 33 months in a now,” Lazone said. “You join Hulu, and the traffic for your own sites goes down.”

And that is why more and more of these studios are trying to keep the distribution of this content in-house.

So what of Netflix, the once flawless streaming service that recently angered consumers and analysts alike with its recent price hike and splitting off of its by-mail service into a new brand, Qwikster?

There was a difference of opinion on that one.

Calkins found Netflix’s latest moves “confusing,” while Gewecke was surprised by the scale of consumer reaction.

But it was Lanzone that took an unlikely stance, defending Netflix CEO Reed Hastings.

“The best CEOs of internet companies are the ones who are willing to take risks,” Lanzone said.” “[Amazon CEO] Jeff Bezos stuck to his guns, which didn’t reflect in the stock well in the short-term but worked in long-term. Reed has been right over and over again.”

When it comes to Netflix’s future, all three speakers agreed that the service will focus on streaming TV series instead of movies, leaving the market for new movie releases wide open.

Where will this new release store come from?

Hint one: It will be based on ownership.

Hint two: The studios will want some control over it

Got it?

The cloud.

  • Brianf

    With all of the industry hype about digital streaming and down loading the total revenue from these digital platforms is only 2% of all revenue for the entertainment business. Digital still has a long way to go and the cost of producing the content is going to increase the cost to stream or download. 

  • Zeprin

    First try making original movies that real people will want to see & hopefully own.
    Failing that… the method of delivery, where it's stored or even the price, won't mean squat.

  • Orca5050

    Ownership of physical media was mostly about consumer convenience.  If you had a DVD on the shelf it was easy to play whenever you wanted it or when you needed to quiet the kids down with a favorite disk.    When content is cloud based and available on demand, the ownership proposition is simply less compelling.  And consumers know that if they are just renting they don't need to pay as much.   The industry certainly needs to come up with better ways to manage yields for new releases, but convincing a customer to buy a  DVD for which the  main new benefit comes from not actually needing the DVD to play the movie since it's also on the cloud seems to be more than a bit self contradictory. 

  • patrick

    people speak of “The Cloud” as some mysterious panacea where all things are possible at a snap of the fingers — it's the least of issues. #1 issue owners of content need to overcome, especially if they wish to continue killing the likes of NF and Hulu and establish a direct to consumer play, is establishing a billing relationship with customers. The greatest trick Jobs and Hastings ever pulled off was convincing tens of millions of people to give up their CC #'s. Great, CBS has the most visited network website. How much ad revenue is that generating? As much as Netflix or hulu or Amazon or Google or Apple would be willing to pay for the content? doubt it… whats the motivation here — winning charlie sheen style or maximizing shareholder return