Sears Debuts Online Video Service

Sears Holdings has launched an online video store that enables Sears and Kmart customers to rent or buy movies and TV shows. The store, powered by Sonic Solutions, marks the retailer's official entry into the online video market dominated by Netflix, Google, Amazon.com, and Apple.

Sears, which owns Kmart, announced the launch of Alphaline Entertainment Tuesday. The new service is offering movies via home computers the same day they are released on DVD. The retailer plans to eventually offer the service on other consumer electronics, including portable media players, Blu-ray disc players, smartphones, and high-definition TVs.

Sonic and Sears first announced plans for the service in June. The online store is powered by Sonic's RoxioNow platform, which also drive's Sonic's own online movie service, CinemaNow. Consumer electronics retailer BestBuy is Sonic's partner in the online store.

Sonic has been investing heavily in infrastructure, software, and device support to build out its movie delivery platform. Earlier this year, the company bought DivX, a maker of technology for compressing video for faster delivery online. Last week, Sonic agreed to be acquired by Rovi for $720 million in cash and stock. Rovi, which offers entertainment data and content protection and delivery technology, expects to close the acquisition early next year.

Sears' entry into the online video market comes as a growing number of people are accessing the Internet through consumer electronics, such as set-top boxes, Blu-ray disc players, and digital TVs. The trend has driven brick-and-mortar companies, such as Sears, BestBuy, Wal-Mart, and others, to stake an online presence in the midst of the growing influence of Internet properties. Google's YouTube, Amazon.com, Apple's iTunes, Hulu, and Netflix are examples of online services that have become major forces in online video distribution.

YouTube is the number one online destination for video, according to ComScore. The Google unit is reportedly hoping to expand beyond its business of offering mostly amateur video through the acquisition of Web-content creator Next New Networks. According to The New York Times the deal, if completed, could mark YouTube's transition from an amateur video outlet into a site for multiple video formats, including professionally produced videos.

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