Mickey Flashing Japanese DVD Buyers

Engadget is reporting this morning that The Walt Disney Company (DIS) is embarking on a pilot project in Japan to bundle microSD cards containing full length features, with the DVDs of the same film, in order to give consumers a portable digital copy option. The packages, featuring Panasonic cards, will be available starting in November with films such as Pirates of the Caribbean & National Treasure and will set Japanese consumers back about $51 (ouch) ...which is $11 more than than a typical DVD (I assume/hope they mean Blu-ray). Disney envisions that the cards will primarily be used in mobile phones, portable media players and GPS devices (sounds dangerous). It will be very interesting to see what how much uptake Disney gets on this product and whether it sustains past the early adopter stage. Generally I like this idea, but always thought it would work better as a piracy mitigation strategy in markets like China (where pirated product owns the market).

Of course, this isn't the first time that full-length films have been put on flash memory cards. Most initiatives have surrounded handset promotions...like Motorola bundling Univeral's Bourne trilogy on a 1gb microSD with its Z10 handset to eventize its European launch. But codec companies, like Actimagine, ROK Entertainment & Mo-DV, as well as flash memory providers like Sandisk and Samsung, have been trying to convince the studios for years to compress movies on to cards as part of a bigger retail play. The most ambitious commercial initiative happened back in September 2005 when Sony Pictures Digital partnered with Carphone Warehouse to sell titles like Spiderman, Ghostbusters & Hitch through the handset retailer's British & French outlets on 256mb cards using Actimagine's codec. The quality of this product was very impressive (especially compared to other mobile playback options of the time). However the project ultimately failed because sales people in the hardware focused retailer didn't understand how to sell this entertainment product to the consumer, matching handsets to the right cards makes the shopping process a little klugy, the product didn't work with a lot of handsets, and...oh yeah, the cards were kinda expensive (like $50). Anyway, bundling is a great way to overcome these issues, if they can be sure that the cards will work with a very broad range of devices in the market. When we get to the point that every device with a microSD slot can play a movie file in one standard format, I think there's an opportunity for a scalable standalone business...particularly as the price of flash memory continues to plummet.