Contentinople - Ryan Lawler - Blockbuster Forges Distribution Deal With Sonic

Written by Ryan Lawler

Wednesday, January 14. 2009 at 03:10 PM EST Post a comment

Digg

Del.icio.us

Email This

no ratings

Video rental firm Blockbuster Inc. (NYSE: BBI) is aggressively expanding its digital distribution through a partnership with Sonic Solutions (Nasdaq: SNIC) that could help its content land on more connected devices.

Until recently, the only way to rent Blockbuster movies online was through the company's Download Store. That changed in November, when Blockbuster announced the availability of a digital set-top box from 2Wire Inc. that allows consumers to rent and watch digital videos and watch them directly on their television sets.

Now, Blockbuster is hoping to expand its online pay-per-view video model even further, with a deal that will make its content available on a wide range of consumer electronics devices, such as digital video recorders (DVRs), Blu-ray players, and even mobile devices.

Sonic Solutions, which purchased the assets of CinemaNow in November, has already landed distribution deals with TiVo Inc. (Nasdaq: TIVO), to enable paid downloads of its movies on Series 2, Series 3, and TiVo HD DVRs; as well as with LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , which will make CinemaNow content available on network-connected Blu-ray disc players. A Blockbuster spokesperson says the first content could find its way onto those devices as early as the second quarter of this year.

Going forward, the companies will work together to get more consumer electronics companies on-board, with a joint offering that bears the Blockbuster brand name and is powered by Sonic's distribution platform.

Sonic's CinemaNow offering has about 14,000 titles for download now, and the Blockbuster deal will add approximately 10,000 titles to that library. But the companies aren't stopping there: According to a Blockbuster spokesperson, they plan to grow the library of content "three- or four-fold" in 2009.

The partnership gives Blockbuster a fast track to digital distribution, as the company attempts to redefine its business in the wake of increasing pressure from ad-supported online video content being shown through Websites like Hulu LLC , Joost , and Sling.com, as well as online streaming services from rental competitor Netflix Inc.

But Blockbuster has a long way to go to catch up with other providers. In the digital distribution game, Netflix got an early lead on Blockbuster, providing its content to a number of broadband-connected devices, including Blu-ray disc players by LG Electronics and Samsung, Microsoft's Xbox 360, TiVo DVRs, and Roku's Digital Video Player.