Video Download Prices Likely to Fall, Says Sonic Solutions CEO

Video download prices probably will fall as the market “comes to fruition” from the growing number of Internet-enabled devices running on RoxioNow, Netflix and other platforms, Sonic Solutions CEO David Habiger said Tuesday at the Jefferies investor conference. Sonic recently renamed its Roxio CinemaNow service RoxioNow.

Videos available through Sonic RoxioNow-based services such as Blockbuster typically sell for $3-$16 depending on the title, but the prices will likely drop as movie studios expand the business, Habiger said. The videos generally rent for 99 cents to $3, he said. The market is expected to grow rapidly this year with the arrival of Best Buy’s RoxioNow-based video download service by mid-year and with Wal-Mart’s recent purchase of Vudu. Best Buy’s service is expected to be available on many of the products it sells. The company bought 670,000 shares of Sonic stock last fall.

For the major studios, this is “the time they try to figure out” what prices will allow the market to grow quickly, Habiger said. Sales of RoxioNow-powered products are expected to hit 3 million units by June 30 and triple by 2011 as more devices integrate the platform, he said. LG Electronics, Samsung and TiVo sell products featuring RoxioNow and other sellers will be added by fall, said Habiger, who declined further comment. RoxioNow’s streaming platform isn’t subject to the release delay that movie studios have imposed on Redbox and others, but it probably will be. “Do I think we'll have 28-day windows going forward? Certainly I do, but we'll have favorable terms,” Habiger said.

RoxioNow expected to have 3D movies available in late 2009 but then pushed off the launch to the second half of this year (CED Jan 20 p1). Sonic has released 3D encoding tools for creating titles and introduced a new version of Roxio CinePlayer BD that allows users to play 3D Blu-ray titles and content downloaded from video. CinePlayer BD also supports conversion of 2D video to 3D. Asustek Computer will ship CinePlayer 3D in G-series notebook PCs with 3D glasses and 120 Hz panels. Sonic also will ship Roxio Video Lab 3D software that enables users to edit and burn personal 3D content on standard DVDs for playback on DVD and Blu-ray players connected to 3D TVs or PCs.

3D movies probably won’t be available for download in “the next week or two, but certainly before the year is out,” Habiger told us. “We will probably sell more standard definition videos in a day than we will in a month of 3D, but it definitely helps sell the devices and the format. This isn’t a technical issue, but people are just gearing up.” RoxioNow also will test delivery of its streaming service with two cable operators and has struck agreements with set-top box suppliers Sezmi and Entone, Habiger said. The platform will be available both at cable head-ends and in set-tops, he said. It also is on Nintendo’s Wii videogames console in Japan using Fuji content protection, Habiger said. Nintendo hasn’t disclosed its plans for the service in the U.S.