Best Buy sells a lot of DVDs, but it is taking another step to get ready for the day when that business shifts online.
The giant electronics retailer on Tuesday is announcing a partnership with Sonic Solutions‘ Roxio CinemaNow service to deliver first-run DVDs streamed online directly to consumers.
The idea, said Chris Homeister, senior vice president for entertainment at Best Buy, is to let consumers pay once for a DVD and then eventually be able to play it on any device: television, Blu-ray disc player, personal computer, handheld media player or smartphone.
The new service will be a Best Buy-branded offering, available starting early next year. “We’re going into this business in a big way,” Mr. Homeister said. “Our goal is to have broad availability in the marketplace, across multiple devices.”
Last month, Best Buy announced a deal with Netflix to stream its movie library to Best Buy’s Insignia-branded Blu-ray disc players. And in September, Blockbuster announced it was working with Sonic to offer Blockbuster’s streaming movie service on consumer electronic devices starting with TiVo DVRs and Samsung high-definition televisions and Blu-ray players.
“All these guys — Best Buy, Blockbuster and Netflix — realize is that the era of the boxed DVD is about to end,” said Tim Bajarin, president of Creative Strategies, a technology consulting firm. “They all have to make the transition to the next generation of movie distribution, streaming directly to the consumer.”
Best Buy, analysts say, has the clout to press both movie studios and consumer electronics companies to adopt a one-time payment model and ensure that movies play on many devices. And the company has the ability to market such a service aggressively to consumers.
Sonic, based in Novato, Calif., is making a transition of its own. It is best known for its DVD-authoring software tools used by the studios. But Sonic has invested heavily in becoming a cloud-based service as the back end for the secure digital distribution of movies. “This whole industry is moving away from discs to electronic distribution directly to consumer devices,” said David Habiger, chief executive of Sonic.
Last year, Sonic acquired CinemaNow, an online movie distributor, from a group of investors including Cisco Systems and the movie studio Lionsgate. CinemaNow, founded in 1999, was endorsed by the Hollywood studios as an alternative to illegally downloaded movies over the Internet, but the service never became popular with consumers.