This morning video technology company Sonic Solutions is announcing that Sears (which also owns K-Mart), will be the latest company to license its RoxioNow platform, a customizable white-label electronic sell-through (EST) and VOD rental service delivering a large library of premium new release studio content through a variety of connected devices. The deal shows momentum for the fledgling platform that has within the past year signed Blockbuster, Best Buy, and Boxee, while amassing a library of over 30,000 download to own and 5,000 new release studio titles.
Mark Ely, EVP of Strategy at Sonic Solutions, whom I spoke with yesterday, is excited to have another retailer on board. He believes retail stores with RoxioNow will help speed up the consumer transition to the digital medium through promotions and education. Brick and mortar stores definitely have an advantage, as it is where many consumers still go to learn about new technology before they purchase. On top of that, it gives retailers a chance to bundle in download offers as an incentive to purchase new Internet connected devices giving consumers a free taste of the platform.
Mark also revealed some details of RoxioNow's cloud-based cross-retail digital locker technology that it will be rolling out fully over the next year. The technology will allow consumers to watch content from any RoxioNow storefront on any RoxioNow enabled device. The digital locker technology will grow in importance for Sonic Solutions as more retailers sign up for the service, creating a larger network of content for consumers to choose and devices to use.
Overall, the deal highlights how ailing DVD sales, in addition to hurting the studios themselves, are also pushing retailers to pursue digital alternatives. The real challenge for Sonic Solutions is the crowded, noisy marketplace. While RoxioNow does well positioning itself against companies like Netflix and Wal-Mart's Vudu by focusing on day-and-date new releases, it is squarely in the path of the incumbent Pay TV providers, which are fighting for VOD supremacy themselves. The trend to watch for is whether the download-to-own model for films and television shows will gain mainstream acceptance and actually pose a viable evolution from DVD sales.
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