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Best Buy to Offer Movie Downloads

3 Nov, 2009 By: Erik Gruenwedel

Best Buy Co. Nov. 3 said it would begin offering on demand movie downloads to portable media devices through a deal with Sonic Solutions’ Roxio CinemaNow technology.

The Minneapolis-based No.1 consumer electronics retailer intends to embed the technology on a wide array of devices, including Internet-connected television sets, portable media players, PCs, Blu-ray Disc players, set-top boxes, and mobile phones.

With the new Best Buy service, consumers will have access to buy or rent an extensive library of premium content including new movies, TV shows, independent films, and older catalog movies, which they will be able to access on devices in the broad ecosystem.

It is anticipated that new releases will be available on the same day they become available on DVD and Blu-ray.

Together with their studio partners, Best Buy and Sonic plan to collaborate on new service and content offerings, including those that leverage digital copies to bridge physical disc sales and electronic sell through.

Best Buy, which also acquired warrants enabling it to purchase shares of Sonic Solutions common stock, will undertake a marketing program to educate consumers about the increased convenience, flexibility, and choice digital content delivery affords.

"Best Buy is in a great position to expand the market for on-demand home entertainment," said Thomas Gewecke, president, Warner Bros. Digital Distribution. "The combination of Sonic's platform with Best Buy's expertise in selling consumer electronics, video content and technical services creates an opportunity for a wide variety of exciting new consumer offerings."

Brian Dunn, CEO of Best Buy, said the deal allows the retailer to make a credible stand in the burgeoning digital distribution market.

"It 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," Dunn said.

Michael Pachter, analyst with Wedbush Morgan Securities in Los Angeles, said the deal is a boost to Blockbuster’s fledgling VOD service.

Blockbuster and Sonic Nov. 2 announced that the Blockbuster name had helped spike consumer awareness of Roxio CinemaNow technology more than 50%.

“It’s hard to know how many people will buy these devices, and how many don’t already have VOD through their cable systems, but it should be a small incremental win for Blockbuster,” Pachter said.



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