Digital software firm Sonic Solutions has purchased Cinema Now, the video download service partially owned by Lionsgate Studios. According to Variety, Solutions bought Cinema Now for $3 million.Â
Sonic plans to use the acquisition to grow its download-to-burn business. It will form a Premium Content Group headed by Mark Ely, Sonic’s exec VP of strategy, whose focus will be on embedding CinemaNow onto devices and expanding the adoption of the company’s Qflix DVD drives in the process.
“CinemaNow is a very logical fit for Sonic,” asserted Sonic prexy-CEO Dave Habiger, who maintains that digital delivery of premium content “is at a tipping point.”
CinemaNow now offers more than 6,000 movies and TV shows for digital distribution over a variety of platforms, and Habiger expects to ramp up existing offerings considerably.
“We hope to have twice that number at this time next year,” he said.
According to Sonic, CinemaNow has been generating around $1 million-$1.2 million per quarter in revenue on expenses of $1 million-$1.5 million. Company, founded in 1999, first offered digital movie rentals, later expanding to downloads when studios allowed that. As it struggled to turn a profit in a tiny market, the service added more profitable softcore adult pics. Nonetheless, it never found much of an aud and, more recently, had a hard time competing against companies like Apple, Amazon.com and Microsoft, which have much greater brand recognition and an ability to leverage existing business with digital distribution.
This is going to be a big market. I guess the costs are something to contend with too