Six Questions: Sonic Solutions’ David Cook27 Jul, 2009 By: Erik Gruenwedel
David Cook, GM and SVP for Sonic Solutions content services and Roxio CinemaNow, handles the movie services’ day-to-day operations, including program management, encoding, merchandising and customer service.
A New Zealand native, Cook came to Sonic and CinemaNow from Seattle-based digital music company Loudeye, where he was responsible for building and implementing their digital supply chain as their VP of media services.
Cook spoke with Home Media Magazine about CinemaNow’s recent partnerships, pricing for electronic sellthrough and the need for better broadband infrastructure in the United States.
HM: It’s a crowded field out there in the world of electronic delivery. What’s setting Roxio CinemaNow apart from its competitors?
Cook: I think one of the obvious differences is that we have new release content the same day as DVD versus content that ends up in the streaming subscription window.
The second thing is that we are working toward a more-open ecosystem. Some of our competitors are a very closed silo, while we’re really working toward buy anywhere, play anywhere: Buy it from any CinemaNow powered store, and play it back on any CinemaNow powered device. The Samsungs and LGs of the world … our goal is to enable them to get into this business and make sure all the devices work well together.
The third thing is the concept of being retail-friendly. That means prepaid cards and working with the retailer. Being integrated with Sonic’s Roxio group for a while, we’re starting to really see how we can leverage each other’s assets, leveraging the historic position that Sonic has had in the supply chain to bring true interactivity into downloads and streaming.
HM: Sonic has announced a wide range of new partnerships in recent months for Roxio CinemaNow. How important are these deals, and can you hint at what we’ll see next?
Cook: With LG it was bringing to market the first connected Blu-ray player with a CinemaNow store embedded in it. It definitely was important because it was our first step into the living room with connected devices. It was the first time adapted streaming had been put into a CE device. Another one that was important, going back a little bit further, was the relationship with Blockbuster, which shows we want to bring people’s brands to market. More recently it was announcing the Nintendo Wii in Japan. The significance of that was that we’re showing we’re moving into the gaming platform.
HM: A majority of studio dollars are made from physical product, but some point to electronic delivery as the future. CinemaNow’s prices for buying a movie, however, are remaining close to standard retail prices for DVD. Will current “buy” and “rent” prices remain where they are for the foreseeable future?
Cook: We definitely agree that physical media is still going to be important for the foreseeable future. There’s obviously a transition period, and we’ve started to focus on things such as “second session” (digital copy) and working with the studios and retailers to standardize their product. It’s a gateway product that helps consumers feel comfortable with digital but still have the comfort of physical disc. However, with that being said, when we do get into digital, there is a little bit more price elasticity, as you start to see CinemaNow being embedded into devices. The flipside to that is as digital distribution starts to increase, we are starting to see more movement as to what the overall pricing structures are starting to look like. I do feel like we’ll make the product very competitive for consumers. An example of that is the $1.99 you’re seeing for second session. Here’s a product that was designed to create value for the consumer, over and above what the DVD was, but it also had to be a low enough price to make it worth their while, for them to choose to try it. It’s been very successful for the studios and us.
HM: CinemaNow has been a pioneer in the download-to-burn arena. What are the obstacles between widespread burning, and where do bonus features fit in?
Cook: Some of the obstacles have been ranging from the supply chain issues to the penetration of drives and media around Qflix. What we’ve felt is that DVD burning is an important part of the entire ecosystem. What you’ll see is that your connected devices in the living room, and connected portable devices will lead the ecosystem. In terms of DVD burning, it fills a roll in reaching these devices. As a lot of the services move toward a “locker” model, there is definitely an issue around the delivery of content from studios, if people can download content and burn it to a DVD, then play it on any standard DVD or a Blu-ray player. Burning is not a leak in the ecosystem but an overall important component. In trials we’ve done around this, the consumer knows they can’t really burn the content, but they feel more comfortable with buying the content.
Bonus features have definitely been a supply chain issue. I think the extras and all the pieces we’re used to experiencing as a part of DVD need to come to not just burning but also download and streaming products.
HM: How important are connected Blu-ray Disc and other set-top boxes proving for CinemaNow’s business strategy, and is there a particular device that stands out?
Cook: When people watch a movie, it tends to be a larger commitment. It tends to be an “us” decision more than a “me” decision — what are my kids going to watch, what are the wife and I going to watch. It tends to be very living room-centric. Consumers don’t want to buy another box. It’s about finding the boxes that they’re already going to buy, or already have living room penetration, and making sure our experience is brought to those devices. That’s why we’ve spent a lot of time on connected Blu-ray players and connected TVs. Another one we’re looking at now is the DTV box.
HM: Solid broadband connections are a must for your product, yet Americans are behind other countries in terms of broadband infrastructure. What changes would CinemaNow like to see along these lines, and how quickly do we need to catch up?
Cook: It’s a very true statement. Looking at the solutions that have been employed for embedded devices, we had to address broadband availability and quality in the U.S. It’s not just if you have broadband, but if you’re watching a movie, and your son starts downloading music, you don’t want that to break the movie experience. That’s why we partnered with Widevine to have adaptive streaming imbedded at the chip level and monitor network availability, not just to the home, but also to a particular device. That way we get a continuous streaming experience. We definitely would like to see continued investment in the broadband infrastructure to make sure everyone really does have good connectivity to the home.