Sonic Solutions Gains on Plan to Make Movie Services Available on IPad
July 30 (Bloomberg) -- Bloomberg's Rich Jaroslovsky talks about the outlook for the electronic-reader market including Amazon.com's Kindle and Apple Inc.'s iPad. Jaroslovsky speaks with Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)
Sonic Solutions Inc. rose the most since March after the company said it will introduce technology for retailers and other partners to offer movies and television shows on Apple Inc.’s iPad and other mobile devices.
Sonic, operator of the RoxioNow online video service, gained $1.09, or 14 percent, to $9.01 at 4 p.m. New York time on the Nasdaq Stock Market. It has fallen 24 percent this year.
By adding video-streaming support for tablet computers and smartphones such as Research in Motion Ltd.’s Blackberry and devices using Google Inc.’s Android operating system, Novato, California-based Sonic seeks to add customers for its RoxioNow service, said Mark Ely, the company’s vice president for strategy. Retailers including Sears and Best Buy have agreed to use Sonic’s technology to offer movies under their own brands.
“You want to give consumers access to as many different devices as possible,” Ely said in an interview. “Now you can start to watch a movie on a Samsung television and pick up right where you left off on your iPad or iPhone.”
The initiative gives Web retailers that work with Sonic an added tool to compete with Cupertino, California-based Apple’s ITunes store in offering films and TV shows. Sonic is collaborating with Seattle-based Widevine Technologies Inc., which creates copy-protection software and uses technology that adjusts the picture for playback on different screen sizes.
“This shows clearly the power is shifting back to the studios in the digital world, and they’re moving to open any walled gardens such as cable, Apple and Amazon so that a movie works on any device and is portable between them,” said Ralph Schackart, an analyst with William Blair & Co. in Chicago.
Sonic is in discussions with content owners to set prices they would charge retailers to deliver it to multiple devices, Ely said. Support for new devices is expected to be available through retail partners by the holiday season, the company said.
Recent Deals
A growing number of companies have begun licensing Sonic technology, which lets users rent or buy films and TV shows for viewing on a number of products.
Sonic agreed in June to provide its system to Hoffman Estates, Illinois-based Sears Holdings Corp., the owner of the Sears and Kmart retail chains, for a Web-based digital entertainment service. Richfield, Minnesota-based Best Buy Inc. and Dallas-based Blockbuster Inc.’s online stores, as well as TiVo Inc.’s digital-video recorders, also use Sonic.
DVD and Blu-ray disc sales and rentals totaled $17.9 billion in 2009, more than eight times the revenue generated by electronic and video-on-demand, according to the Entertainment Merchants Association in Encino, California.
Sonic has licensed thousands of movies from the major Hollywood studios, Ely said. In June, Sonic agreed to buy DivX Inc. for about $300 million in cash and stock, gaining technology to stream Internet movies.
To contact the reporter on this story: Cliff Edwards in San Francisco at Cedwards28@bloomberg.net.
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