Best Buy in Broadband VOD Partnership with Sonic Solutions

Electronics retailer, Best Buy, and Sonic Solutions, the digital media company that last year acquired the pioneering broadband VOD service, CinemaNow (it subsequently added "Roxio" to the service's name in order to make its branding consistent with its other products), announced Tuesday that they have formed a strategic partnership that will enable Best Buy to launch a broadband VOD service based on Roxio CinemaNow. The companies, which announced a partnership earlier this year (see the article published on itvt.com, June 7th) but provided few details at the time, say that they have signed a multi-year agreement, under which Best Buy will license and deploy the Roxio CinemaNow technology and services platform, in order to make on-demand digital content delivery a standard feature on connected consumer electronics devices sold in US Best Buy retail stores and on BestBuy.com. The agreement also sees Best Buy acquiring warrants enabling it to purchase shares of Sonic Solutions' common stock.

Best Buy says that it plans to embed Roxio CinemaNow technology on a wide range of devices it sells, including connected TV sets, portable media players, PC's, Blu-ray Disc players, set-top boxes and mobile phones from a variety of manufacturers. It also plans to launch a marketing program to "educate consumers about the increased convenience, flexibility, and choice digital content delivery affords."

According to the companies, the new Roxio CinemaNow-powered service will allow consumers to buy or rent an extensive library of premium content, including new-release movies, TV shows, independent films and older catalog movies--many of which will be available day-and-date with their DVD release. The companies say that they also plan to work with their studio partners on new service and content offerings, including ones that leverage digital copies to bridge physical disc sales and electronic sell-through. "Our relationship with Sonic Solutions allows Best Buy to quickly establish a strong position in the digital delivery of video entertainment," Best Buy CEO, Brian Dunn, said in a prepared statement. "It also enables us to make deeper and more meaningful connections with our customers and expand our relationships with content owners and hardware vendors to create compelling new home entertainment solutions." Added Sonic Solutions president and CEO, Dave Habiger: "With Best Buy's ability to drive in-store promotion and education, consumers will come to quickly understand and appreciate the convenience, flexibility, and control that digitally delivered video entertainment affords them. With Best Buy's focus, we expect on-demand entertainment to quickly grow into a mass-market activity, with digital sell-through and rental becoming a significant new revenue stream for content owners."

According to Sonic Solutions, Roxio CinemaNow includes Hollywood approved DRM, encoding and adaptive delivery technologies, and secure, device-optimized playback of premium entertainment. The company claims that the Roxio CinemaNow "ecosystem" includes PC's, connected TV's, DVR's, and Blu-ray Disc and mobile media players from such companies as Archos, Dell, HP, LG, Microsoft, Nintendo, Pioneer and TiVo. Roxio CinemaNow also powers broadband video content delivery for Blockbuster.