Why Hollywood’s Experiencing a ‘Digital Renaissance’ with Digital HD
When Hollywood paired up with the consumer electronics industry and retailers to introduce UltraViolet two years ago, the digital storage locker was meant to encourage consumers to buy rather than rent movies online.
UltraViolet may still be signing up new subscribers, but studio home video divisions have thrown their weight being a new brand name — Digital HD — to grow their pot of digital dollars.
Every major screen and set top box on display at the Consumer Electronics Show in Las Vegas this week features the real estate for apps that can sell Digital HD titles at the click of a button.
Twentieth Century Fox, which came up with the name and has been pushing it hard with each new tentpole release, was able to rally studios around the concept of releasing digital versions of films for purchase two weeks before their DVD or Blu-ray hits retail shelves.
“The screen has become so valuable as platform to sell movies,” said Mike Dunn, president of Twentieth Century Fox Home Entertainment and the only studio president on the Consumer Electronics Assn.’s Board of Industry leaders.
Consumers have found the titles attractive because of their price (usually around $15), early availability two weeks before a movie’s DVD or Blu-ray is released, access through most digital retailers, and easy playability on TVs, cable boxes and mobile devices.
While Fox has found that Digital HD is beating comparable titles by over 100% (“The Wolverine” is its biggest seller on the format to date), and overall industry electronic sell-thru sales rose 49% through the end of the third quarter to $764 million, according to the Digital Entertainment Group, the more noteworthy number is who studios are reaching with the titles.
After years of declines, “the business has flattened out over the last two years,” Dunn said. “The progress we’ve made in the last year has been dramatic. We’re at a point of a new kind of digital renaissance right now. Digital HD is already meaningful; it’s the real deal.”
Around 35% of Digital HD customers have never purchased a digital version of a film before, Fox said, with the studio estimating that there are 40 million consumers who are digitally active but have never started a digital collection of films.
There are signs they’re now starting to make the move to digital. At last count, digital sell-through of films grew around 50% over the past two quarters for Fox, with other studios seeing similar results.
That’s only good news for divisions at studios that have long lamented the decline of the once powerful DVD, and as a result, a major moneymaker. And Fox and its counterparts are only optimistic looking forward given the amount of digital devices consumers have embraced at home and on the road.
But Hollywood still has more work to do.
Each Digital HD title still needs to be marketed, and while studios are saving money with campaigns that live mostly online (where the target buyers are), the efforts must still capture consumers’ attention.
“The Wolverine’s” Digital HD release was pushed across the Internet and on every social media platform, but also at McDonald’s and on Microsoft’s Xbox One, as part of a contest.
“The challenge is to make the marketing effective and deliver the results on the day that you need to get people out there,” Dunn said. “ITunes, Amazon, Target Ticket, Comcast, they have the same metrics as a movie theater would. If the movie performs, they get behind it even more. If it doesn’t perform, (the title) is moved to the side.”