Disney Unveils KeyChest Technology

The Walt Disney Co unveiled a technology called KeyChest to enable consumers to buy films or television shows from various distributors, store them on remote servers, and play them on multiple platforms ranging from TVs to computers and phones. Disney said it plans to rollout KeyChest for both the U.S. and the international market, and that it will soon announce partners who will participate in the program.

"Discussions are going to step up dramatically at the Consumer Electronics Show," said a Disney spokesman, referring to the upcoming technology conference in Las Vegas.

Disney said negotiations with content distributors, cable companies and telecommunications services have been ongoing for several months. Disney hopes the technology will be deployed before the end of 2010.

The company also said a third-party company will operate KeyChest, and that it expects other studios to make their content available through the authenticating technology Disney has developed.

Company officials said the goal of KeyChest is to make it easy for viewers to see a movie accessed from various outlets and to address the issue of compatibility in maneuvering content from device to device as well as limited storage space on consumers' hard drives. She also said this was not intended as a Disney only venture.

"The idea is to have all the movies consumers want to buy available in this way," said Kelly Summers, vice president of digital distribution at Disney, in a briefing about KeyChest. "If it's Disney only, there really isn't much value here," she said.

Disney officials said they hope to use KeyChest to build momentum for the long-stalled digital distribution of films.

It comes at a critical juncture for the industry which saw the sale of films on DVDs and Blu-rays drop by an estimated 13% in 2009. Online sales of movies, the hoped-for bright spot for the industry, grew from $150 million to $250 million in 2009, but not an enough to offset the decline in physical sales.

With KeyChest, a consumer can buy a movie from a participating store. That customer's account with other participating services, such as telecom services or cable companies, would be updated to show the film is available for viewing.

Summers stressed that KeyChest will not be a service that consumers access directly. Rather, Disney envisions KeyChest as a program that retailers can tap into to verify that consumers have already purchased the right to access a movie, and then make that movie available to the consumer across different devices.

By Alex Dobuzinskis and Sue Zeidler, The Hollywood Reporter