Sonic Solutions to Expand Distribution of DivX Content

Sonic Solutions will “accelerate and expand” distribution of DivX-encoded titles as it works to bring them onto its RoxioNow video download platform, Mark Ely, executive vice president of strategy, told us.

The “integration” of the RoxioNow and DivX platforms follows Sonic’s purchase of DivX that was completed earlier this month, bringing together download services that provide the underpinnings for Blockbuster on Demand, Best Buy’s CinemaNow’s, Media Markt and others. Sonic will continue to make movies available in DivX’s open video system format that’s at the heart of Warner Brothers’ WBShop.com, Filmfresh.com and MediaMarkt, Play4Film.com and others, Ely said. Best Buy was expected to install kiosks in its stores this fall to promote CinemaNow.

"There is already some level of integration, but we're going to tighten that up and make it a much nicer solution over the coming quarters,” Ely said. “We will integrate the open video system so it becomes one system with RoxioNow. The real goal is make sure the consumer has seamless access to movies across a whole range of different formats and give them the flexibility to have those files in the DivX format so they can play them back on DivX-supported devices."

Sonic also plans to gradually add DivX titles to Blockbuster on Demand and Best Buy’s CinemaNow, although how the movies will be promoted to consumers in still being worked out, Ely said. Sonic is emphasizing DivX as one of the formats that “can be downloaded from any of our Web stores,” Ely said. Presumably this would include the Sears/Kmart’s RoxioNow-based download service that’s being developed as well as set-top boxes being deployed by Sezmi and Entone. Sezmi claims to have its DVR/STB-based service available in 36 U.S. markets and recently signed an agreement with YTL Communications to develop a hybrid broadcast TV/4G wireless service in Malaysia.

Sonic also is continuing to pursue DivX TV and DivX Plus HD initiatives, Ely said. DivX TV, which provides more than 140 “channels,” launched earlier this month in two LG Electronics Blu-ray players as a free service and will be extended to other CE manufacturers by January, Ely said. DivX TV appears as part of LG’s NetCast service, which also includes Netflix and others. Among the DivX TV content suppliers are The Associated Press, Break.com, CBS, CNET, Pandora and others. Sonic also is making DivX Plus HD, which can deliver 1080p H.264 video in the MKV file format, a “major initiative” and CE companies are in the process having flat-panel TVs and Blu-ray players certified, Ely said. Hisense and Skyworth are DivX Plus HD licensees, the latter having had 32- and 47-inch LCD TVs certified.

Following the acquisition, Sonic created a DivX Division headed by General Manager Matt Milne, who was executive vice president of sales and marketing at DiVx. Tom Huntington, who was brand director at DivX, was named senior director of marketing of the new division, while former DivX CEO Kevin Hell was appointed to the Sonic board. Former DivX Chief Financial Officer Daniel Halvorson left the company. Sonic retained “the majority” of DivX’s 370 employees, Ely said. Divx’s MainConcepts business, which develops H.264 technology, was combined with Sonic’s professional division, Ely said. DivX bought MainConcepts in 2008.

As for 3D, Sonic is working with a “couple of” CE manufacturers and movie studios to make content available for RoxioNow and expects to reach some agreement by year-end, Ely said. The 3D titles will likely be priced at a “slight premium” to HD movies, which typically sell for $15 to $20 or can be rented for $3.99 to $4.99. “We're certainly gearing up to have it fully ready to go by the end of year, but it depends what our partners’ launch schedules looks like,” Ely said. While there is some “prep work” needed to encode 3D titles and Sonic had to make some changes in its supply chain to accommodate them “it wasn’t anything dramatic,” Ely said. Sonic had expected to have 3D movies available through RoxioNow late last year. “The issue really is more about getting the content and making sure our device partners are ready to deal that sort of download,” Ely said.