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Netflix bows out of studios' UltraViolet group

CES is expected to be a big event for the UltraViolet film platform, which some say is the successor to the DVD. Despite the apparent significance, Netflix has chosen not to participate.

Netflix is out of the consortium that created UltraViolet, the technology platform designed to make digital movies accessible to any device or service.

Greg Sandoval/CNET

Sources told CNET that the highest-ranking executive representing Netflix within Digital Entertainment Content Ecosystem (DECE), a group of more than 70 companies connected to the film industry, recently did not renew his membership. Current members include Hollywood studios, software and hardware makers, film distributors, and retailers.

While Netflix may maintain some low-level DECE presence in the future, the company in large part cut ties to DECE a while ago, the sources said. Netflix executives have rarely, if ever, participated in the group's planning meetings or conference calls since joining not long after DECE was formed three years ago, according to the sources.

A Netflix representative declined to comment for this story.

I've written this before, but I'll say it again: at CES, UV and its backers have to show that major Web retailers are interested in taking part. That notion is doubly as important now, since the No. 1 movie rental service has opted out. Apple, the maker of the most successful mobile devices, has never been a DECE member.

You can hear more about UV tomorrow during a panel that includes members of DECE leaders. The panel, being held at the Venetian Hotel and Casino, starts at 3 p.m. PT.

UV is a set of specs and standards designed to help consumers play their films on any gadget, and buy and store them at any outlet or cloud storage service. DECE members say this will help consumers avoid having their movies become locked into any single online store or device manufacturer.

Depending on who you ask at the studios, UV is either a successor to the DVD, which has seen declining sales for years now, or a value-add to film discs. To this latter group, UV offers a new functionality that will boost the value of, say, movies in Blu-ray Disc format.

The proposition goes something like this: buy a DVD or Blu-ray disc, and store a copy in your own online storage locker. No one argues about what UV's main purpose is: entice consumers to start buying movies again.

As we all know, Netflix isn't about sales. Maybe the company's reluctance to participate in DECE is related to UltraViolet's apparent lack of interest in renting movies. Or perhaps Netflix sees UV as a platform positioned to level the competitive playing field among movie distributors; why would a front-runner like Netflix want to get involved with doing that?

Netflix can largely credit its consumer-friendly business model for the wild ride it has taken over the past decade to becoming the dominant film rental service. The company currently enables users to watch as many movies online as they want for $8 a month. If they want to rent discs, they must pay an additional $8. And if they want to own a title, they must go elsewhere.

Although executives at some of the big studios have tried to convince Netflix CEO Reed Hastings to sell movies, he has largely declined. But according to All Things Digital, Netflix has agreed to wait 56 days before renting Warner Bros.' newly released DVDs. That move, designed to help prop up movie sales, expands the so-called sales-only window from 28 days.