A vendor sells balloons at the Walt Disney Co. Magic Kingdom park in Orlando, Florida. (Photographer: David Ryder/Bloomberg)

Disney Said to Ask Other Studios to Join Digital Movie Service

(Bloomberg) -- Walt Disney Co. is in talks with other major Hollywood studios to join its Disney Movies Anywhere service, which lets customers buy, watch and store their online film purchases at a single site, people familiar with the strategy said.

Disney is trying to add content from other studios to boost the appeal of its offering, which was introduced in 2014, said the people, who asked not to be identified because the discussions are private. Disney has been in an ongoing tug-of-war with five other major studios and many smaller players that support a format called UltraViolet.

Hollywood has struggled to adapt to collapsing DVD sales, dwindling box-office attendance and rising competition from digital distributors like Netflix Inc. Electronic purchases of movies and TV shows have been a bright spot in the U.S. home entertainment industry, with spending up 7.5 percent to $1.46 billion through nine months of 2016, according to the Digital Entertainment Group, an industry-backed consortium.

“Our commitment with Disney Movies Anywhere has always been to grow digital ownership and improve the value and utility of digital purchases, and we’ve been thrilled with how DMA has been received,” Disney said in a statement.

Disney shares were little changed at $103.80 as of 9:38 a.m. in New York trading. The stock is down 5.1 percent in the past year.

Disney Movies Anywhere uses a proprietary storage technology called KeyChest to let customers store and access movies at a single site, whether they’re purchased from Apple Inc.’s iTunes, Amazon.com Inc., Google Inc. or Wal-Mart Stores Inc. The service offers films from all of the company’s brands, including Disney, Pixar, Marvel and Lucasfilm.

UltraViolet offers a similar product -- an online locker with movies and TV shows from Warner Bros., Universal Pictures, Sony, Paramount, 20th Century Fox and dozens of other providers. Disney may have to change the name of its service to attract the other moviemakers.

Warner Bros. Chief Executive Officer Kevin Tsujihara said in March 2015 he hoped to connect the UltraViolet platform with that of Disney so consumers weren’t confused.

“You can do so while having separate platforms, but as long as it’s seamless to the consumer and the interoperability that we talked about is there,” he said at a Morgan Stanley conference last year.

UltraViolet had 21 million registered accounts at the time. Warner Bros., a unit of Time Warner Inc., didn’t immediately respond to requests for comment.