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Sonic Solutions To Acquire CinemaNow

11/19/2008 03:46:00 PM Eastern

Novato, Calif. — Sonic Solutions has entered into a definitive agreement to acquire privately held online video and movie distributor CinemaNow.

The acquisition comes shortly after the two companies announced a collaboration to enable the download and burning of DVD movies by integrating Sonic’s Qflix technology and CinemaNow’s content-delivery system into new DVD drives from companies including Dell and Pioneer.

CinemaNow, which is based in Marina Del Rey, Calif., started out delivering digital entertainment content for download rentals and purchases. More recently the company has shifted its focus from an online Web store model to embrace an embedded content strategy that enables PC and CE manufacturers to access content directly on their devices.

The provider’s Web site presently lists more than 10,000 movies, TV shows and music videos available to consumers across multiple platforms.

CinemaNow has relationships with more than 250 content providers, including all major Hollywood studios, and supplies premium entertainment services to a host of PC and consumer electronics device manufacturers such as Dell, Hewlett-Packard, Samsung, TiVo and Archos.

Sonic said CinemaNow will be combined with Sonic’s Qflix team to form “a new premium content group,” which will focus on “increasing the placement of CinemaNow’s storefront on PCs and CE devices and expanding the adoption of the Qflix technology platform.”

“With broadband-connected consumer electronics hitting the market in ever greater numbers, there is a growing need for a service that gives consumers one-click access to premium entertainment on any device in the digital home,” stated David Cook, CinemaNow president and COO. “The combination of CinemaNow’s content and embedded device strategy with Sonic’s technical prowess and broad PC and CE distribution promises to fulfill CinemaNow’s original mission — giving consumers easy access to the best of Hollywood from their PCs, TVs, mobile phones or anywhere in their digital ecosystems.”

“The digital delivery of premium content is at a tipping point,” added Dave Habiger, Sonic Solutions president and CEO. “By providing consumers and OEMs user-friendly content services and software that works across multiple platforms, we will make it possible for any device or PC manufacturer to add an online movie store of Hollywood hits to its products. With CinemaNow, we look forward to expanding and deepening our relationship with OEM and retail partners as well as with the millions of consumers that we touch today through our Roxio-branded digital media applications and online services.”

As the leading provider of professional software systems used in the creation of Hollywood titles on DVD and Blu-ray Disc, Sonic said it has “deep ties to the entertainment industry.”

Sonic said it expects to close the acquisition shortly.

According to a spokesman for Sonic Solutions, the deal “has been in the works for sometime and was not precipitated by recent market conditions or competitive efforts.

CinemanNow’s Cook and chief technology officer Jesse Keane will join Sonic along with the engineering and operations teams.

A Sonic spokesman said “we plan on keeping the CinemaNow operations in their current location in Marina Del Rey.”

“We see this new strategic direction as similar and complementary to our OEM strategy,” a Sonic spokesperson told TWICE. “We’ll focus on expanding CinemaNow’s reach by continuing to pursue device partnerships, starting with some of our existing OEM partners. This is one of the reasons why we believe CinemaNow is a good fit with Sonic.”