‘Thousands’ of Titles Vowed For Launch of Walmart’s Disc-to-Digital Service

Walmart Entertainment announced its Vudu-based Disc-to-Digital service Tuesday at a news conference webcast. John Aden, executive vice president of general merchandise for Walmart, said the service would enable consumers to enjoy the content they already own on DVD “while unlocking value in the investment they've already made."

Transfer cost of consumers’ DVDs and Blu-rays to comparable-quality video in the cloud is $2, Aden said. The cost of converting a standard-def DVD to HD-quality digital is $5. From consumer testing on the conversion prices, Walmart found that $2 and $5 were “right in the sweet spot,” Aden said. “For $2, you're breathing life” into a format that’s “not able to go into the future,” he said.

According to Ron Sanders, president of Warner Home Video, the studios and Walmart will launch a “massive campaign on the scale of a blockbuster film launch” to educate consumers about the Disc-to-Digital service, which rolls out April 16 in 3,500 Walmart stores across the country. Sanders didn’t disclose the cost of the multi-month campaign, which will also be funded by Sony Pictures, Universal, Fox and Paramount. In addition to TV and radio advertising, the campaign will include interactive in-store displays and retail events to raise awareness and increase understanding of the service, Aden said. “It’s very important that we tell this story outside the store,” he said. “We're going to have to tell the story loud and frequently to help people understand what we're doing."

Aden repeatedly said the service is both a physical and cloud-based service to reinforce that DVDs will be around “well into the future.” Physical and digital movie ownership “are not mutually exclusive,” he said. “Digital movies are not replacing physical DVDs.” He called digital movies a “complement” to physical DVDs, and said consumers want physical DVDs and they want the “convenience that comes with digital ownership.” The service will “dramatically change the face of entertainment,” he said.

Walmart worked hard to make the service “simple and affordable,” Aden said, and worked with Fox, Paramount, Sony Pictures, Universal and Warner to make “thousands of America’s favorite movies” available for the service. Consumers who bring their DVDs to Walmart stores will get a digital version loaded onto Vudu,” he said. Once the copy to digital has been completed, consumers “get to keep” the discs they've already bought, Aden noted. To access those movies, consumers log into Vudu from an Internet-connected device and “watch their movies,” he said. The absence of Disney from the studio roster wasn’t addressed.

Following the announcement of the Disc-to-Digital service, which is exclusive to Walmart, Aden said the company was “also proud to support UltraViolet.” He noted that through Walmart’s Vudu service consumers will be able to watch any UltraViolet title they own regardless of where the movie was originally bought. Virtually all of the Blu-ray players the store sells offer Vudu, he noted.

Regarding whether the Disc-to-Digital service might be done at home by consumers, Aden said Walmart is focused on the in-store experience. “There are a lot of people who haven’t experienced digital ownership” so the company’s focus is on the in-store process, and it will stay that way for quite a while,” Aden said.

In response to a question about working with Apple and Amazon in the future to unify the different cloud-based services, Aden said the group has been “so focused on the present” it hasn’t had time to think about the future. “We believe that this will help customers be confident in buying physical DVDs today, and that can only be good for the industry,” he said. He acknowledged a segment of the population that’s been nervous about buying physical discs for fear of obsolescence and said, “Now by combining the two, they can future-proof their digital purchases."

The group didn’t discuss the financial opportunity for studios to generate additional revenue from products consumers have already bought, but Sanders cited the scale of opportunity resulting from the 10 billion DVDs purchased in North America to date. “Even converting a small percentage of that makes it the largest cloud overnight,” he said.

"This is truly a revolutionary moment,” said Craig Kornblau, president, Universal Studios Home Entertainment, calling Disc-to-Digital the “ushering in of the digital movie ownership era.” Starting from the familiar format of what consumers have already purchased is “a fantastic way to start this initiative,” he said.