New Disney system aims to win digital format war

Wed Jan 6 2010, 15:20 PM

Disney is revealing new technology designed to boost digital sales of films and TV programmes by allowing consumers to rent or buy content for viewing on a range of platforms. The company says it is in negotiations with content distributors, cable companies and telecoms services to participate in the programme. Disney is aiming to roll out the KeyChest technology in the US and internationally before the end of 2010.

As DVD sales continue to slump, Disney hopes it can make legal downloads more appealing by making the wide range of anti-piracy technology used by various online retailers compatible. However, the firm faces stiff competition from the Digital Entertainment Content Ecosystem (DECE), the joint venture between companies including HP, Netflix and Sony which also aims to manage the digital distribution of content. DECE is focusing on creating a new file format which will be used by all its members, while Disney’s programme promises to use "technology designed to help different platforms communicate with each other".

Analysts are questioning the viability of both systems given that Apple, one of the main online retailers, is yet to sign up to either. Many are also predicting a format war, similar to that between VHS and Betamax, and Blu-ray and HD-DVD.

"The KeyChest-DECE battle is going to be the definitive format war for the digital era," Arash Amel, senior Screen Digest analyst, tells the Financial Times. "This is about who controls digital formats for the next 15 to 20 years."