SmartStream

Physical DVD and Blu-ray collections may soon be a thing of the past—the trend is clearly toward streaming movies from online sources. Walmart and the Hollywood movie studios know this, and they've responded by announcing the Walmart "Disc-to-Digital" service. I've been focusing on streaming media for a number of years, and I'm extremely excited about this forward movement by retailers and Hollywood movie studios.

The Disc-to-Digital service will begin April 16, 2012. Bring in your DVD and Blu-ray collection to one of the 3500 participating Walmart stores, and an employee will enter the titles into your Vudu account so you can stream them to any compatible device. For $2 per title, you will get access to a standard-definition version of any DVD and a high-definition version of a Blu-ray Disc. For $5, you can upgrade and get Vudu's Dolby Digital, 1080p HDX version of your DVD.

And while some may balk at the idea of paying for a title they already own, the studios reason that customers bought a disc and now they are buying a digital copy. After all, no one handed you a DVD of your VHS titles, nor a Blu-ray version of your DVDs. At least you don't have to pay full price for the digital movies as you would if you bought them from iTunes or Amazon.

Walmart spokesperson Sarah Spencer explained the process to me: When a customer comes into the store with their DVD and Blu-ray collection, an employee will check each disc against a list of verification standards to determine if it is eligible for Digital Copy access. Once verified, the employee will "grant the digital rights to the customer's Vudu account" so they can stream it to any computer or Vudu-enabled device. Walmart claims "it will take approximately six minutes for seven titles."

It's important to understand that you won't get access to every title in your movie collection. Firstly, only movies distributed by Paramount, Sony Pictures, Twentieth Century Fox, Universal, and Warner Bros. are part of the Walmart Disc-to-Digital Vudu program. Notably, Disney and MGM are missing. And according to Spencer, while there will be "thousands of titles available to be converted," not every movie released by these studios will be eligible. Once the service launches, customers will be able to see what movies are available for the Disc-to-Digital service on the Vudu website.

The list of available titles will provide an insight into how the studios view digital streaming. Will the service be more like Netflix and include older, obscure titles? Will it include a small sampling of recent blockbusters in the same way that UltraViolet cloud access has only been offered on a handful of titles?

For those not familiar with it, UltraViolet launched in October 2011. Included on several Blu-ray movie titles, this feature provides the disc owner with access to the title in the UltraViolet cloud-streaming movie library. The process is cumbersome and confusing; frankly, it has yet to work for me.

When you purchase a movie that has UltraViolet, you are provided a registration code that puts the title in your UltraViolet online movie library. Theoretically, you can access these movies through a Flixster app to stream to a media player or mobile device. I have a couple of titles that I've registered, but I have not yet succeeded in streaming them.

UltraViolet is mentioned in Walmart's Disc-to-Digital program rollout, but this is confusing, since the service makes movies available through Vudu, not UltraViolet. There has been no official clarification regarding how UltraViolet is involved.

I spoke with a technology engineer familiar with streaming software, who indicated that the titles might actually be registered in an UltraViolet library but viewed through Vudu. While the movie would actually be streaming from an UltraViolet library, it would appear to be coming straight from Vudu as far as the user is concerned.

I have been unable to confirm this theory, but it does explain why UltraViolet is mentioned and why studio executives have said that the titles would be available in an UltraViolet library.

The movie-studio executives claim that this service will restore consumers' confidence in buying physical media—DVDs and Blu-ray Discs—because they can now watch those titles wherever they want, in the same way they can stream digital movies. Still, the Walmart Disc-to-Digital program is more likely a transition toward the day when movie delivery will become all-digital.

Consider this:

• The Walmart Disc-to-Digital service brings more consumers onboard as digital customers. Walmart employees will literally hold the hands of people who have never experienced or are not comfortable with digital media, ushering them into the world of streaming.
• Why would the studios continue manufacturing physical media when the profit margin would be so much greater for digital media that does not require replication, packaging, shipping, and more? Digital delivery is a boon for the studios' bottom line.
• Walmart's Disc-to-Digital service fee is found money. This is profit that was undoubtedly not included in the original forecasts for the original disc releases.
• Customers are getting used to renting movies or subscribing to streaming services. This will bring back the idea of owning a library of your favorite movie titles, reminding people that they should buy, not rent, digital movies that they want to watch over and over again. And it cements the studio's place in the future of home-entertainment delivery.

In 1998, I was working at a Good Guys electronics store, and a co-worker predicted that one day we would get all of our music and movies directly from online. It seemed like heresy and fantasy at the time, but it is no longer far-fetched. Hey, Raffi, your prediction is about to come true!