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Will DVD kiosks have a new competitor in UltraViolet movies?

March 7, 2012

Industry analysts are predicting that Walmart will announce its support for Hollywood's UltraViolet digital movie technology at a media event next week in L.A., according to a blog on the L.A. Times site.

Walmart is the nation's biggest seller of DVDs, responsible for up to 40 percent of all sales in the U.S., so support could provide a much needed boost to UltraViolet, which had a troubled launch last fall.

Despite the fact that five of Hollywood's six major studios and dozens of electronics manufacturers support the technology, it's not yet caught on with the masses. Ultraviolet lets consumers store copies of movies they buy in the cloud and then access them from any compatible digital device. 

Walmart will sell Ultraviolet-enabled copies of movies through Vudu, an online video service it acquired in 2010, according to the blog. Known as "disc-to-digital," shoppers will be able to bring copies of DVDs they own into stores, and Walmart employees will give them a copy of the movie in their UltraViolet account for a small fee.

Technological glitches and a cumbersome registration process generated negative consumer reactions when Ultraviolet debuted, admitted Warner Bros. Home Entertainment Group President Kevin Tsujihara.

He and other Hollywood executives have said it is critical for Ultraviolet to succeed in order to turn around ongoing declines in home entertainment revenue.

Experts predict that once Walmart begins supporting UltraViolet, it's likely that other retailers such as Best Buy will follow. Amazon.com, the largest online DVD retailer, in January announced a deal giving it the rights to sell Ultraviolet digital copies but hasn't started offering the service.

What does this mean for the DVD kiosk industry?

The support of Walmart for UltraViolet is indeed a needed boost for the initiative, saidSoheil Samimi,president of iMOZI, a DVD kiosk company. However, he doesn't expect the launch to effect the kiosk business since the goals of the business models differ.

"UltraViolet is part of the studios continuous drive to increase sales of DVDs, while the kiosks almost entirely cater to rental transactions. Therefore, we are talking about different types of services, at different price points, for different consumers — or at best, different needs of the same consumer. As for the long term, redbox is obviously conscious of the digital conversion trend and already taking steps to complement their service with such functionalities."

Read more about DVD kiosks.