Under the deal, the service will carry the Blockbuster brand and will be marketed by the movie-rental company. Sonic, best known for the Roxio DVD-burning software, will power the offering through its content-delivery system, which the company acquired in November with its purchase of CinemaNow. The latter online service offers pay-to-view, movies-to-own, and the ability to burn films to a DVD for viewing on a TV. CinemaNow offered more than 6,000 movies as of late last year.
The deal with Blockbuster expands Sonic's distribution system to include movie downloads to Apple and Microsoft Windows PCs, portable media players, Blu-ray disc players, personal video recorders, set-top boxes, mobile phones, and Web-connected TVs. The companies claim they will create "one of the most expansive video-on-demand and electronic sell-through offerings in the marketplace."
"Our goal is to offer consumers the most digital content, the most accessibility, via the most devices, both in and out of home," Jim Keyes, chairman and chief executive of Blockbuster, said in a statement.
In building the service, Blockbuster plans to market it online and through its retail stores, where the company also plans to sell some of the supporting devices. Blockbuster has more than 7,500 stores worldwide. Blockbuster and Sonic said they're working with a host of consumer electronics manufacturers, but did not say who they are.
In launching the upcoming service, Blockbuster is putting the heat on rival Netflix, which is also working hard to offer movies on home devices. LG Electronics this month announced plans to offer Netflix movies through Internet-connected digital TVs planned for the spring.
LG and Samsung currently offer Netflix on some of their Blu-ray disc players. LG is expected to add CinemaNow and YouTube access in the first half of this year.
Netflix, which offers 12,000 movies online, also streams movies to TiVo digital video recorders and Microsoft Xbox video-game consoles. The company has partnered with device manufacturer Roku in a direct-to-TV gadget that can stream Netflix movies. Blockbuster launched a similar deal in November with 2Wire, offering 2,500 movies through its set-top box.
The overall online video market is expected to grow from $1.2 billion this year to $4.5 billion by 2012, according to analyst firm In-Stat. How much of that will be online movie rentals is unclear. The same In-Stat study found that more than half of U.S. consumers still favor purchasing physical disks when they buy movies or TV shows.