Market Insight

Movies Anywhere launches with broad studio support

October 13, 2017

Irina Kornilova Irina Kornilova Manager, Research and Analysis, Broadband Media

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20th Century Fox, Warner Bros., Sony Pictures and Universal Pictures have joined Movies Anywhere, the rights locker and playback service led by Walt Disney Co. The new service syncs purchase records for movies consumers have bought from different online movie stores or via redeemable codes includes with DVD and Blu-ray disks. This allows content to be played back via the partner service of their choice or via the Movies Anywhere App across a range of devices. The service is only available in the US.

At launch the partnering service providers are Apple iTunes, Amazon, Google Play and Vudu which make up over 70% of the US digital purchase market.

Movies Anywhere is set to replace the single studio Disney Movie Anywhere, and echoes much of the prior service’s functionality as both leveraged KeyChest Disney’s digital rights locker. The most notable differences are the larger number of participating studios and less use of secondary content such as behind the scenes video to enrich the experience.

Paramount Pictures and Lionsgate are the only major studios that reportedly aren’t joining Movies Anywhere yet. 

Our analysis

Movies Anywhere service is the product of studios putting and service providers combining efforts to provide end users with more compelling, digital product. As the assurance of being able to play a movie across services and devices, should help to build trust in digital purchase and boosting the appeal of digital purchase. It creates additional value for customers and encourages them to invest money in buying content as the notion that the content will follow you even if you move from one device ecosystem to the other is now being established. 

Digital movie purchases in the US are goring and this move needs to be seen first and foremost as a way of making a growing category more appealing. However, it is hard not to see it as also containing a defensive element with content owners and service providers trying to pre-emptively protect revenues from purchasing movies that are under pressure as the physical market continues to fall, and subscription and ad-supported online channels offer growing bouquets of compelling content drawing consumers time and money away from digital purchase.  This latter category means that product enhancements like Movies Anywhere are essential for digital purchase to continue to grow.

Ultraviolet, the alternative attempt to create a digital locker service, backed by  an alliance that includes Warner Bros., Universal Pictures, Sony, Paramount, 20th Century Fox, BBC Worldwide, Lionsgate and Anchor Bay as well as some retailers, continues to operate but has failed to generate the same level of service provider participation. In the US UltraViolet is supported by Fandango, Fios, Vudu and Kaleidescape, as well as Sony and Paramount’s direct to consumer services. There were multiple reasons for lower uptake over the years, including:

·      Tensions around UV's centralised usage rules. Disney Movies Anywhere let service providers keep their standard usage terms for customers, which led to them winning over providers like Apple, Amazon and Google.

·      Some service providers have taken the view that the potential “lock in effect” that comes with not participating in a digital rights locker is strategically beneficial. This list does not, as is some times thought, include Apple who were the launch partner for Disney movies Anywhere.

IHS Markit does not expect Movies Anywhere to meaningfully impact service provider market shares over the near to medium time frame. The clearest precedent for this is when music went DRM-free where Apple’s iTunes remained the dominant player for music purchasing. Simply put, iTunes maintained market share because of the power of its hardware-plus-content-service ecosystem, rather than the power of Apple's proprietary DRM to lock customers in.  

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