ArtsWatch: Upload Your Movies, Live Better?

Walmart's disc-to-digital program pushes consumers to bring their movie collections online
March 19, 2012 -- 7:35 am PDT
By Philip Merrill / GRAMMY.com

In recent news ...

On March 13 Walmart announced that its in-store disc-to-digital program will launch April 16 in more than 3,500 locations, encouraging customers to walk in with their DVD and Blu-ray home movie collections and digitize their titles on Vudu's video streaming service. Priced at $2 for standard resolution and $5 for high definition, disc-to-digital enjoys the support of five major studios — Paramount, Sony Pictures, Twentieth Century Fox, Universal, and Warner Bros. — but notably, not Disney. Universal Studios Home Entertainment President Craig Kornblau said, "With the launch of this pioneering service, Blu-ray and DVD buyers are afforded both the opportunity and the affordability to future proof their movie collections and assemble their own digital libraries that can be easily stored and accessed through their own UltraViolet cloud for viewing anywhere, anytime." UltraViolet, the brand name for the Digital Entertainment Content Ecosystem, is a framework for Digital Rights Management designed to allow authorized users to access titles across a multitude of participating services and devices, each able to use its own unique variety of compatible DRM. Although that futuristic ecosystem is not a consumer proposition yet, Vudu will immediately provide convenient streaming access on about 300 devices, and theoretically will serve as a long-term repository for the list of movies in consumers' collections that could become viewable on an increasing range of services and devices. Walmart acquired Vudu in early 2010 and will initially be competing against Amazon's ownership service, the Apple iCloud cyberlocker and online rental services such as Netflix.

Beginning last December, China's two top online video websites — Youku with 21.8 percent of the market and Tudou with 13.7 percent — began accusing each other of copyright violations in what looked likely to shape up as a major test of the Chinese legal system. On March 12 the companies announced a harmonious resolution, merging the smaller into the larger in a $1 billion stock-for-stock transaction. Tudou will retain its brand identity within the strategic combination, which will be called Youku Tudou Inc. "We expect to see significant synergies across a number of areas including leveraging licensed content over a larger user base and realizing efficiencies in bandwidth management and other common expenses," said Victor Koo, Youku founder and Chairman/CEO. Both companies have been losing money and face more than a half dozen significant, smaller competitors. A spokesperson for search engine Baidu's competing video platform iQiyi welcomed the merger and said, "From an industry perspective, Youku and Tudou's deal is conducive for the healthy development of the sector."

On March 14 Aereo launched in the New York area with two copyright infringement lawsuits pending against it in the Southern District of New York's U.S. District Court. Broadcasters argue the company can't retransmit their over-the-air television content without a licensing arrangement. But Aereo presents itself as a variation of the TV antenna, arguing it equips each consumer with independent hardware so the customer controls their own personal broadcast receiver and chooses whether to view conveniently converted video over the Internet, either later or in real-time. Empty gimmick or bold new business model? Aereo investor Barry Diller said, "One of the reasons I love it is it's going to be a great fight." We might be hearing both sides for years if Aereo isn't smacked down soon by a preliminary injunction. The service is starting by invitation only and for Apple users only, at $12 per month after a 90-day free trial period. If the business model survives into summer, fans of copyright litigation as bloodsport will look forward to Aereo spreading to other major TV markets, accompanied by the howls of indignant broadcasters. Consumer advocates are likely to inform us of their conviction that this isn't piracy, but just format- and time-shifting (supposedly). Stay tuned for more action.

On March 15 a new digital royalties class action suit was filed against Universal Music Group, this time by members of the Temptations. In addition to Eminem's ongoing lawsuit over the same subject matter — additional royalties due based on calculation as licenses at a 50 percent rate instead of as sales at a far lower rate — this new class action suit follows two filed last November — one by Rob Zombie and the estate of Rick James and another by Chuck D. Separately, on March 7 in the Southern District of New York's U.S. District Court, Sony Music Entertainment and BMG Music filed proposed settlement documents for the joined digital royalties class actions respectively brought against them by Elmo Shropshire of Elmo & Patsy and by the Youngbloods, also over the 50 percent rate for digital licenses. These actions began with suits brought by Cheap Trick and the Allman Brothers, however those bands settled for slightly less than $8 million and are no longer members of the plaintiff class. As part of the settlement, more than 1,000 Sony and BMG artists whose iTunes sales did not exceed 28,500 downloads by the end of 2010 are eligible to split $300,000 evenly regardless of whether they have recouped label expenditures made on their behalf. Of the remaining funds, one-third will go to attorneys and two-thirds — approximately $5.3 million — will be allocated to the 100-plus artists with more than 28,500 downloads, prorated based on sales, with the funds potentially being applied to the artists' unrecouped balances with their label.

Courtesy of his song and video for "Nobody's Death," Spanish musician Eme Navarro is part of a different kind of denial of service attack, hoping to clog the procedural gears of his country's new antipiracy Sinde Law by flooding it with hundreds of complaints. Navarro is encouraging "illegal" uploads of the song to deliberately create a logjam of cases based on the new law. Participating activists said, "There are thousands of us who have decided to disobey the Sinde Law. We will be the front line against a law designed by and for an obsolete industry. Internet wants to be free, and it will be."

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

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