Best Buy Launches Movie Download Service With CinemaNow

The multiyear agreement allows Best Buy to license and deploy the CinemaNow platform embedded as a standard feature on connected devices sold by Best Buy. Under the terms, Best Buy acquired warrants to purchase shares of Sonic Solutions common stock.

Users will be able to buy or rent "a vast library of premium content" on Web-connected televisions, portable media players, PCs, Blu-ray disc players, set-top boxes and mobile phones by companies such as Archos, Dell, Hewlett-Packard, LG, Microsoft, Nintendo, Pioneer and TiVo sold by the retailer.

The available content will include new movies, television shows, independent films and older catalog movies, according to Best Buy. The retailer expects to offer new titles the same day they are released on DVD.

"Best Buy is in a great position to expand the market for on-demand home entertainment," said Thomas Gewecke, president of Warner Bros. Digital Distribution, in a statement. "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."

Dave Habiger, president and CEO of Sonic Solutions, said Best Buy's market presence will help develop the audience for digital delivery.

"Consumers will come to quickly understand and appreciate the convenience, flexibility and control that digitally delivered video entertainment affords them," said Habiger in a statement. "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."

Best Buy hopes to capture some of the burgeoning on-demand digital content market. Monday, Sonic Solutions announced that a similar agreement with Blockbuster Video had exceeded the companies' initial launch expectations for content through TiVo DVRs and Samsung TVs and Blu-ray players. The Blockbuster On Demand initiative is driving 50 percent higher attach rates than historic figures for CinemaNow-powered devices, according to Sonic Solutions.

"Latest device reports are a clear indication that we've found a winning formula in combining our Roxio CinemaNow content delivery platform with one of the most recognizable brands in entertainment," Habiger said in a statement Monday.