Analyst: UltraViolet movie pricing proves studios ‘don’t get it’

Several major movie studios are backing the digital video platform UltraViolet, but according to industry expert Dan Rayburn the new distribution model highlights their ignorance of what consumers actually want and expect from streaming video.

Writing at his StreamingMedia blog, Rayburn condemned movie studios for having no idea what they’re doing when it comes to online video. The analyst cited Paramount’s UltraViolet in particular as failing to address the modern consumer’s desire for more options, less restrictions and cheaper prices:

What studio executive thinks consumers are going to pay $22.99 to stream a movie when we can buy the DVD for $7 or rent it for less than $2? The economics don’t make sense for how the studios price digital content and the fact they are keeping Netflix and others from even renting physical discs, only so they sell more DVDs, clearly shows where their true interest lies – and it’s not in digital. At some point, the studios are going to get burned just like the music industry did and while they spend a lot of time complaining about piracy, they need to wake up and realize that consumers are demanding digital content, for a fair price. So far, the studios are not willing to give it to them and over time, are going to see their business models crumble as of a result. They own arrogance is going to be the death of their legacy business.

Rayburn also noted that the studio’s recent addition of cloud-based UltraViolet streaming fails to work on Android and Windows smartphones, with iOS-based platforms only seeing standard definition support. For those customers still interested (and not locked out), prohibitive pricing awaits.

“On the ParamountMovies.com website, a recent movie from 2010 costs $22.99 to buy in HD, yet a movie that is thirteen years old is only $3 cheaper and still costs $19.99,” said Rayburn.

Rayburn’s stark criticism follows a December report from research group IHS that warned an UltraViolet failure would further damage an already suffering home video market. Consumers have cut back on buying DVDs, said IHS Principal Analyst Tom Adams, while those who buy online have so far failed to make up for the foundering sales. (via Home Media Magazine)