Converting your physical disc library to a digital locker

There has been a significant amount of press this week around the Wal*Mart announcement to provide consumers the ability to get UltraViolet digital copies of their existing Blu-rays and DVDs starting on April 16th.  The concept for the consumer is that your bring your collection (minus Disney movies) into the store and they do some magic and create digital copies in your digital locker to be accessed through your Vudu account online.  They perform this service for you for a mere $2 per DVD (presumably then generating a non-HD digital copy) and $5 per Blu-ray disc (presumably for the HD digital copy).

Does this sound like a deal to anyone or does it sound like the consumers are getting the short end of the stick?

A few things to think about first:

• Apple does not support Ultraviolet, so you will not be able to view your converted library on your iPad or AppleTV.
• There will be content gaps.  Disney does not currently support Ultraviolet, and there will be many other smaller studios that don't yet support them either (the other 5 majors do).  I am curious to see how this will be handled on April 16th at your local Wal*Mart store.
• If my memory is correct, the average consumer in the US currently has a library of about 70 DVD and Blu-rays (I will try to dig up this data to confirm).  That mix in 2012 is probably 80% DVD and 20% Blu-ray (I am making an educated guess about penetration over time).  So the cost to convert the average person's library (assuming all titles were supported by Ultraviolet) would be roughly $182.  Ouch!  I have over 400 DVDs and about 40 Blu-rays, so I need to get a 2nd mortgage to convert my library.
• $2 vs. $5 presumably for better quality video.  Let's think through this.  Your typical DVD puts out an average bit-rate of about 10 mbps in video rate (this is a measure of how much data is transferring from the disc/player to your tv screen).  I say average because intense scenes (big explosion, etc) push more data and slow moving scenes push less.  The average bit-rate of a Blu-ray is roughly twice that (about 20 mbps).  The typical "SD" or standard definition download or stream from iTunes, Amazon, Netflix, Vudu, Hulu, etc, is around 2 mbps.  What is typically called "HD" for high definition is pushing 4-6 mbps (720p vs 1080p matters here because there is more data to push).  Vudu's "HDX" is supposedly in the 10 mbps range.  Now I am sure all of the videophiles out there (and the experts behind download services compression algorithms) will jump in here to say that they are compressing the data "in a smater way" than is typically done for DVD and Blu-ray and therefore get a better picture as a result.  I would dispute that for a wide range of fact-based reasons, but even if we gave them a 20% improvement based on this urban legend, what do we have:  We are paying $2 for a video to be transferred to my digital locker that is only 20-30% as good as my physical SD version and $5 for a video that is 25-30% the quality of my Blu-ray HD version.  Seems like a pretty poor deal.
• What are my options?  Well, legally, none.  Despite the urban legend that I can rip DVDs and Blu-rays for "personal use", it is still illegal according to the digital millennium act.  But what if I were a 19 college student who perhaps cared less about these kinds of laws?  I could use a number of paid-for and free software programs available on the internet to "rip" a copy of the DVD or Blu-ray into an .mp4 file.  Let's pretend I pay $30 for "good software" (making this up).  Let's pretend that I have to spend 12-15 minutes each time I want to make a copy for my personal consumption (typing in the title, the destination, importing into my program for viewing, etc, though the actual transcoding might take an hour while I am doing something else).  Let's pretend that I get paid $10 an hour as a college student.  My 70 title library would now "cost" me $170-205 (12-15 minutes) to put together.  The cost for this library moves and and down based on the consumer's perception of the value of their own time.
• What about quality trades?  The great thing about getting an officially sanctioned copy of the title in your digital locker is that it has all of the searchable metadata (title, summary, cast, etc) already done for you.  The pro for using locally available software is that you can have a high-quality encode (depending on the source and your tool) every time (ie better than the $5 version).

• What are my options moving forward for new titles?  A little research on Amazon tells me that I can buy an "Ultraviolet enabled" version of the title when I buy new movies.  The price difference varies.  It seems that Warner Brothers is including it with the DVD and Blu-ray for nearly the same price as the discs used to be alone, where as Paramount, Sony and others are charge $2-7 more for a bundled product that is the DVD + Blu-ray + Ultraviolet Digital Copy.  My other alternative is of course to buy it from iTunes (typically at the same price as the DVD or Blu-ray), and while I do not get the physical disc nor do I get an UltraViolet compliant digital copy, I get the movie in my "iCloud" service, and can download/stream to any of my apple devices (AppleTV, iPads, etc).  If you have tried registering a purchase in Ultraviolet, you know that the experience is complicated and confusing--unlike a purchase from Apple.  There has been some activity (from Paramount) offering the digital-only UltraViolet copies to consumers, but this is typically not the case (ie buy something in Vudu, it is stuck in Vudu).

So what does all of this mean?  

It means that for the non-technical or time-valued (and legally conscientious) segments of the population, there will be a service where you can bring your physical library to "jumpstart" or convert to a digital library, held in a digital locker which will work with multiple providers but that does not work with Apple (bad based on iPad penetration) and carries an annual fee (not mentioned on the UV site but only your first year is free of charge).

Going forward, it means you can buy physical copies (if you like) and still get a digital copy in that same UltraViolet digital locker service.  You will also be able to buy just digital (soon) and have access to that version in your UltraViolet digital locker.  Or you can stay in the Apple ecosystem and have all your movies and TV series (including the ones you purchased digitally over the last few years) with no hassle, no sign-ups, and no incremental fees.

It seems that while the "iCloud" enabled TV shows and now movies has gotten very little attention, they seem to already have outdone the industry supported effort in terms of ease of use and cost to the consumer--except that you have to be committed to be only in the Apple ecosystem.  

What if you are a big Apple ecosystem owner and want to convert your physical library?  Unfortunately, today at least, there are no legal options here (just the route reserved for those who are technically adept and have time on their hands).

So this service is a step in the right direction for a large segment of the population, but here is what they need to do to help this achieve wide-spread adoption:

• Solve the pricing issue.  Give the consumer a bulk-rate discount to convert 50 or 100 movies at a time to encourage them to do it.  Drop the $2 vs $5 disparity since both are inferior in quality that the version on the disc in the first place.
• Create digital service options that are Ultraviolet compliant.  Meaning, let me purchase a movie in the Vudu service and view it on my Amazon or Flixster service.  Make all the other digital services as easy as using iCloud when accessing my digital locker.
• Get the rest of the content creators / studios to join UltraViolet (they all have agreed to iCloud for Apple).
• I am not going to suggest they get Apple to join UltraViolet because with iCloud for movies, it is clear that with iPads covering 85%+ of the tablet market and the iCloud service being simple and free, they don't need join--they just need a legal physical library conversion option (which I doubt the studios will grant unless they join UltraViolet)...