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Movie Piracy 'Alternative' UltraViolet is Shutting Down - TorrentFreak
When UltraViolet was first launched eight years ago, it was portrayed as a convenient alternative to piracy.
The cloud-based service, backed by major Hollywood studios, allows users to store digital copies of purchased films and TV-shows, which they can then easily access on various platforms and devices.
In the years that followed UltraViolet amassed over 30 million users, but in recent times things went downhill. The number of supported retailers slowly started to drop and this week parent organization DECE threw in the towel, Variety reports.
According to the official announcement, the planned closure on July 31 was triggered by “market factors” including the rise of new platforms.
“In the years since UltraViolet's launch, we've seen the emergence of services that provide expanded options for content collection and management independent of UltraViolet. This and other market factors have led to the decision to discontinue UltraViolet,” the statement reads.
[...] The good news is that in ‘most’ cases, users can still redeem their UltraViolet codes through the retailers which are still operating. This includes VUDU, Kaleidescape, and Sony Pictures.
“In most cases, we anticipate very little impact,” DECE notes. “While there could be some disruption, we do not anticipate this on a broad scale and are working diligently to minimize and avoid such instances.”
(Score: 5, Insightful) by ledow on Monday February 04 2019, @05:13PM (1 child)
It's simple maths.
If I paid £10 for a disc, and you need to give me access to it forever, that means you need a server running 24/7, capable of streaming a HD/4K movie on-demand, over the Internet, permanently set up and ready to go at the click of a button, for whenever I might decide to do that. For every disc. For every customer. And you probably get, maybe, if you're really lucky, £1 per disc to do that from the purchase price. If I asked you to keep a server farm running with stupendous Internet connections, serving 30m customers burst with 4K content, storage and transmission, how long do you think £1 would last?
The economics are "fixed price" versus "regular ongoing cost", so it quickly falls over and becomes unprofitable unless you can sucker everyone into UV'ing every disc they buy, and having them all buy lots of movies regularly.
When you then price the discs at ridiculous prices, it's no wonder that it doesn't work out. And even with that, it falls over itself a few years in.
Like game-servers, game-streaming and many other services, you're able to get investment, build the service and then just be there long enough to watch it fall apart as it stops scaling.
Steam is funded by a constant market of transactions in the background but will suffer the same problem if it keeps running long enough (which is why it takes a percentage of all sales, not just the initial purchase price).
It's like me saying "I'll give you £10 now for a locker to store my stuff in, but you'll give me access to my storage locker 24/7/365 whenever I need it into perpetuity, even if you're 100 years old and I never give you another penny". It doesn't scale.
There's a reason I never touched UV.
(Score: 2) by All Your Lawn Are Belong To Us on Monday February 04 2019, @06:19PM
+1 insightful though of course it's slightly more complex than that.
You get a storage cost savings because you only need one copy of the movie (ok, you need more than that regionally....) and the streaming cost depends on what bandwidth package you can negotiate (although there is a low-bottom end to that based on peering and transit charges). But if I'm getting that ten percent cut from the studio to add the service in, and you never once stream the movie, then I take that ten percent and never have an expense for it (or it services the amortized expense of the hosting but never runs a recurring charge). So my real variable cost and dependent profit is based on both continuing the service in perpetuity with new titles (always being paid for the new titles a studio adds) and having a sufficient number of nonusers who subsidize those who do end up using it. Kind of like a gym membership, or even better insurance policies, except as you note there is no further income coming in. But like insurance policies, I can take that ten percent times fifty thousand sales and invest the proceeds on it so my ongoing streaming expenses are annuitized, assuming I can get a better return on investment than the streaming costs later. If it is "studio doesn't pay until the account is created" then it's much more troublesome, but if I were TPTB I would have charged for every code on every disk whether it was ever redeemed or not.
This sig for rent.