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Rise In Streaming Suggests Death of DVDs?

Rise In Streaming Suggests Death of DVDs?
January 7, 2013 2:29PM

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"Allowing consumers to 'convert' or purchase digital rights to DVD and Blu-Ray movies from the comfort of their homes is a big step up from having to bring your discs to your local Walmart. Recall that DVD movies have not -- and still do not -- offer managed copies -- meaning consumers cannot legally make digital copies of the content like they can with CDs."

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Will the DVD soon go the way of the VHS cassette and the landline? News from the Consumer Electronics Show in Las Vegas (CES), taking place this week, illustrates how more companies are trying to feed consumers' hunger for watching movies without having to rent, buy or borrow the pesky discs.

AT&T announced that it will offer customers of its U-Verse pay TV service Screen Pack, access to a library of (mostly older) movies for an additional $5 a month.

Competition Is Hot

The nation's biggest retailer, Walmart, on the other hand, has a potentially more far-reaching service, whose scope is determined by the user's own DVD and Blu-ray library. You can take your previously purchased titles -- whether it's last year's Marvel's Avengers or Gone With The Wind -- and transfer them online for just $2 through Walmart's Vudu service for an UltraViolet digital copy, stored on a cloud to be accessed by all your mobile devices.

Previously, the service was offered at Walmart outlets.

The two companies are far from alone: Apple already makes a mint selling downloadable movies. Sony and Google, too, are trying to break into the smart TV business, while Netflix and Hulu have virtually put Blockbuster, the DVD rental king, out of business.

Intel is also expected to make an announcement at CES about a new concept in "virtual cable" to stream content to TV sets. At the same time, Verizon Communications is teaming with $1 retailer Redbox to offer another video service.

Walmart's service will allow its customers to build up their own virtual movie collection, potentially clearing out shelf-space at home, with the option to upgrade to an HD version of the film for an extra $3.

"Digital movie or TV show collections remain a developing market," said digital-home analyst Michael Inouye of ABI Research.

"Allowing consumers to 'convert' or purchase digital rights to DVD and Blu-ray movies from the comfort of their homes is a big step up from having to bring your discs to your local Walmart. Recall that DVD movies have not -- and still do not -- offer managed copies -- meaning consumers cannot legally make digital copies of the content like they can with CDs."

Veronica Marshall, a spokesperson for Walmart, told us that DVDs converted to digital do not have to be purchased by the user from Walmart. That means anyone can borrow a disc from a friend, or the library, and end up with a very cheap copy. "We are trusting our customers to not pass on DVDs from one friend to another," she said.

Could Boost Rentals

Letting customers shift their movies to the cloud for a cheaper price than a download from iTunes or comparable service is a cost-effective upgrade, says Inouye. It will also likely drive Walmart's movie rental service.

In announcing its new service, Walmart also introduced a Facebook app it said will give customers access to exclusive movie content and allow them to "influence" what movies are sold in stores and online.

"From Smartphones to Smart TVs, our customers are consuming and sharing content more than ever," said Walmart's John Aden, executive vice president for general merchandising, in a statement. "We see a great opportunity to provide our customers with accessible and affordable tools to help them bring their movie collections into the digital age.

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