Best Buy partnering with CinemaNow to stream first-run DVDs to 'all web-connected devices sold'

Can you live without physical media? Are you ready to buy into owning a license without any physical property to show for your purchase? We hope so 'cause that's the future. Today Best Buy will announce confirmation of its rumored partnership with CinemaNow in a deal that will stream first-run DVDs directly to consumers. Better yet, according to an AP report, the software required to access CinemaNow's video library "will be included on all the Web-connected devices sold in Best Buy's more than 1,000 U.S. stores." If taken literally then wow, just wow... that's a lot of devices. However, since Best Buy sells Apple's iPhone and iPod touch, and there's no way that Apple's going to let a retailer tamper with its devices, we think the AP's wording is a bit ambitious.

The idea here is simple: pay once for a DVD then eventually be able to play it on any device be it a television, Blu-ray player, PC, smartphone or some other connected device. The new Best Buy-branded service will launch "early next year" according to Chris Homeister (yes, that's his real surname), as Best Buy gets "into this business in a big way." Remember, Best Buy already announced a streaming Netflix deal and partnerships with TiVo and Napster that will be launching early next year as well. And we've already seen Sonic Solutions, CinemaNow's owner since last year, bunging its 1080p-capableCinemaNow service into every connected-device imaginable -- even 3D content for 3D Vision-ready displays. The whole concept sounds very much like Disney's Keychest which already sounded very much like the Digital Entertainment Content Ecosystem (or DECE) consortium. Hopefully Best Buy will clear up the details later today when this gets really official. The future is now -- too bad US broadband is so yesterday.

Update: It's official. The agreement will allow customers to "buy or rent" from CinemaNow's library of content on "connected consumer electronics" sold through Best Buy retail stores or BestBuy.com. New titles will "often" (note the qualification) be made available day and date of the DVD release. The service will also leverage digital copies to bridge the physical and digital stream worlds. See the full press release for all the detail.

Show full PR text

Best Buy Co., Inc (NYSE:BBY) and Sonic Solutions (NASDAQ:SNIC) today announced a strategic relationship that will result in a new Best Buy customer offering in its growing line-up of digital entertainment products. The new on-demand movie and entertainment service will be powered by Sonic's Roxio CinemaNow™ and will allow consumers to have access to buy or rent a vast library of premium content.

To power this offering, Best Buy has entered into a multi-year agreement in which Best Buy plans to license and deploy Sonic's Roxio CinemaNow™ technology and services platform to make on-demand digital content delivery a standard feature on connected consumer electronics devices sold throughout U.S. Best Buy retail stores and BestBuy.com. Under the terms of the agreement, Best Buy acquired warrants enabling it to purchase shares of Sonic Solutions common stock.

Best Buy, one of the largest consumer electronics retailers in the world, has a strong track record of bringing innovative technologies to a broad audience through its consumer-focused marketing, education, and Geek Squad services. To foster the consumer appetite for obtaining on-demand premium content electronically, Best Buy intends to embed the Roxio CinemaNow technology on a wide array of devices - web-connected television sets, portable media players, PCs, Blu-ray Disc players, set-top boxes, and mobile phones - from a variety of manufacturers. Best Buy expects to undertake a marketing program to educate consumers about the increased convenience, flexibility, and choice digital content delivery affords.

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 titles will often be available on the same day they become available on DVDs in retail outlets. Together with their Studio partners, Best Buy and Sonic plan to also collaborate on new service and content offerings, including those that leverage digital copies to bridge physical disc sales and electronic sell through.

"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."

"Our relationship with Sonic Solutions allows Best Buy to quickly establish a strong position in the digital delivery of video entertainment," said Brian Dunn, CEO of Best Buy. "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."

"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," said Dave Habiger, president and CEO, Sonic Solutions. "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."

Roxio CinemaNow includes Hollywood-approved digital rights management, encoding and adaptive delivery technologies, and secure device-optimized playback of premium entertainment. Roxio CinemaNow's cloud-based media services power devices which consumers can use to seamlessly enjoy video entertainment anytime and anywhere across the broadest range of devices. The Roxio CinemaNow ecosystem includes PCs, connected TVs, set top DVRs, Blu-ray Disc and mobile media players from leading manufacturers such as Archos, Dell, HP, LG, Microsoft, Nintendo, Pioneer and TiVo and is powering internet movie delivery for Blockbuster.