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Best Buy makes move into digital

Retailer to rely on CinemaNow movie service

Best Buy’s move into digital movies will closely hew to the paths broken by Netflix, Blockbuster and other competitors, using a branded movie service available through Web-connected Blu-ray players and other devices made by multiple manufacturers.

The retailer, which is now beginning to provide details of a partnership with Sonic Solutions that was announced in June, will rely on Sonic’s Roxio CinemaNow movie service to handle movie delivery and the technological backend for the service, saving Best Buy from having to create a digital movie service from scratch. The service will be branded under the Best Buy name, with the retailer handling all marketing and promotion.

Terms of the deal were not disclosed.

Sonic Solutions executive VP of strategy Mark Ely said Best Buy’s store reach and marketing power could help “take Internet video from an early adopter category to more of a mass market phenomenon.”

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Ely said as part of the deal, Best Buy will train employees on digital movies and devote space to connected set-tops and accessories, and spend money to educate consumers and promote the digital movie service to encourage consumers to try it out.

Neither company said exactly when devices are expected in stores.

The partnership is similar to one Sonic struck with Blockbuster earlier this year, which has begun rolling out through devices and stores in the last month. Blockbuster’s movie service, the backend of which is run by CinemaNow, is now available on TiVos and Samsung HDTVs and Blu-ray players and set to debut on other devices in coming months.

Best Buy has been stepping up its digital commitment in recent months. Two weeks ago, it announced a partnership to bring Netflix’s streaming movie service to its Insignia Blu-ray players. In June, it first partnered with Sonic, linking to Sonic’s CinemaNow web site from Bestbuy.com for movie downloads. Ely called today’s announcement a “natural extension” of the partnership.

During the company’s second quarter earnings call Sept. 15, Best Buy chief executive officer Brian Dunn hinted at a major move into digital, saying, “We’ll see more digitally-connected services. Over time, you will see the center of our stores evolve to the manifestation of that.”

Sonic’s Ely said in coming months, the company will make it easier for consumers who buy a movie from any Roxio CinemaNow-powered movie service to watch it through any other service it powers. For example, a customer who buys a movie through Blockbuster.com on their TiVo would be able to watch it on their Insignia Blu-ray player through Best Buy’s movie service.

“The goal is to make it possible for devices sold from different retailers to be completely interoperable from a consumer standpoint,” Ely said.

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