Co. hatching digital movie biz

Stung by falling DVD sales, Best Buy is on the verge of launching a digital movie service that could debut as early as this summer, according to studio insiders.

The chain is in talks with CinemaNow and other online movie services to create a download business that it hopes will offset falling DVD sales, studio execs said.

Details on how exactly Best Buy would benefit from a potential partnership with CinemaNow, and others, are still being finalized. But one possibility is that Best Buy would market and sell Web-enabled devices — from TVs to Blu-ray players — that would include built-in access to CinemaNow’s library. Such devices may roll out as soon as this summer. Best Buy would presumably share in the revenues generated from downloads or streaming with CinemaNow or another provider.

At present, Best Buy is advertising job openings for digital movie executive positions on such tech-geared sites as PaidContent.org.

The strategy is similar to what Blockbuster and online disc retailers Amazon and Netflix have done over the last year. Blockbuster partnered with CinemaNow in January to offer movie downloads through a variety of set-top devices including TiVo digital video recorders and Blu-ray players. The partnered service is set to debut in the second half of the year. Amazon offers its video-on-demand service through TiVo and Roku players, and Netflix offers its instant viewing service on those devices and others.

It’s unclear how Best Buy would align with manufacturers for these new digital movie-enabled devices.

Reps for Best Buy and CinemaNow did not respond to a request for comment.

CinemaNow has pushed to offer its download service through a variety of devices and partnerships. Previously, Best Buy had been working to launch its own separate branded download store. It appears these plans fell through some time in 2007.

DVD leader Wal-mart briefly sold downloads with partner Hewlett-Packard through Walmart.com in 2007 but the service never evolved out of a test phase, and the retailer’s site was closed when partner HP exited the download business. Downloads were tied to the PC and unwatchable on the TV or other devices.

(Susanne Ault and Jennifer Netherby are reporters for Variety sister publication Video Business.)

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