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Best Buy, Sonic Set Up For Movie On Demand Service

Posted on: Tuesday, 3 November 2009, 12:47 CST

Best Buy has announced plans to partner with Sonic Solutions to develop its own video on demand service.

On Tuesday, Best Buy said it has agreed to a multiyear deal with Roxio CinemaNow technology. The deal gives Best Buy warrants that will allow it to purchase Sonic Solutions common shares.

Shares of Sonic increased 16 percent to $6.08 following the announcement on Tuesday.

Shares of Best Buy were up 0.7 percent to $39.18, according to the Wall Street Journal.

"Our relationship with Sonic Solutions allows Best Buy to quickly establish a strong position in the digital delivery of video entertainment," said Brian Dunn, chief executive of Best Buy.

The company has yet to announce a name for the new service, or specific dates on when it would launch.

"We are seeing the transition from physical media to digital ... Obviously major retailers want to be transitioned," Ralph Schackart, an analyst at William Blair, told the Wall Street Journal.

"From Sonic's perspective, what you gain out of this is a grass roots marketing that Sonic doesn't have to fund," he said. "It gets digital content to Middle America, and all those blue shirts explaining how to use it."

Sonic has announced its pans to hold a conference call on Tuesday to discuss the new agreement.

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On the Net:

• Best Buy
• Sonic Solutions

Source: RedOrbit Staff & Wire Reports

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