Movies would come with UltraViolet codes, which you would enter into the website, and then you would be able to watch the movies on linked retailers (mainly Vudu). It's largely been replaced by Movies Anywhere, which Disney spearheaded and has much larger participation than UltraViolet.
Movies Anywhere also makes the basic idea a lot more trustworthy, because it's effectively a full cross-redeeming of licenses between a number of services rather than just a single service. To lose any of the purchases linked with it, every involved company would need to shutter their video services.
"Keychest" was always the better tech. It's been fascinating to see it actually win out over the "worse is better" first mover advantage UV quickly staked out. It's also fascinating that for the most part there isn't any scorched earth from the consumer side of this war; several key retailers seem to have made it a mission that most users wouldn't even notice the transition of all their old UV keys to MA unlocks. Things have mostly just worked out.
This is true, there’s also the aspect that if you bought a movie on Vudu and opened an account on Flixster or some other UV service, the UV compatible (all?) movies would show up there too (not just the code entered ones).
Movies Anywhere does this for supported movies (which is not as many movies as I'd like it to be, to be sure). I can buy a movie on Vudu and watch it on Amazon Video or Microsoft's video stores (Windows/Xbox) or I think on iTunes, so long as I link my accounts. It's not quite the vision I have where platforms, not retailers, handle the front end and make it transparent to me what provider is giving me the movie (if I want to watch a movie, I shouldn't have to care if it's on Hulu or Netflix or whatever, I should just be able to pick it and watch it), but it's a step in the right direction.