Sonic Solutions (NASDAQ: SNIC) has announced that its RoxioNow platform will be used for a new video download and distribution platform for none other than Sears Holdings Corp. (NASDAQ: SHLD). We recently covered how Rovi Corporation (NASDAQ: ROVI) just announced a $720 million acquisition of Sonic and that might have to fetch a higher price than the $720 million to get done. Today’s news may echo that feeling to some, but the real question is whether or not Sears can make a dime on this effort.
The plans for the Sears service, called Alphaline Entertainment, first came up about six months ago. The aim is to allow the Sears and K-Mart customers to download movies on the same day as they are released on DVD. The service plan is to allow portable media players and mobile phones along with HD TV and Blu-ray Disc players downloads.
Sonic acquired DivX and already offers online movies through CinemaNow with Best Buy Co. (NYSE: BBY). Netflix Inc. (NASDAQ: NFLX) and others are already dominating this space as well. Wal-Mart Stores Inc. (NYSE: WMT) acquired Vudu for movie downloads as well earlier this year, although Wal-Mart has kept Vudu as separate of a brand as it could be and there is no mention of Wal-Mart anywhere on the Vudu.com website.
Sears is hoping that this is going to be free money for the company and its shareholders. Unfortunately, as the space becomes more crowded each day there may be fewer and fewer differences among services out there. When Movie Gallery opened near Blockbuster locations, all that happened was that the two brick and mortar movie rental giants cannibalized each other that much faster.
JON C. OGG
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