Sonic Solutions acquires CinemaNow

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Sonic Solutions, the company that makes the software for burning CDs and DVDs, today reached an agreement to acquire the online movie service CinemaNow of Marina del Rey.

The $3-million deal brings together two firms that had collaborated for more than a year on a technology for downloading and burning DVD movies at home, using Hollywood’s copy-protection system. The first products using Sonic’s Qflix technology were announced this fall.

CinemaNow, a digital venture started in 1999 with backing from Lionsgate and Microsoft Corp., was one of the first services to allow users to (legitimately) download movies over the Internet. It has since been eclipsed by rival offerings from Apple, Amazon.com, Netflix and Blockbuster. CinemaNow, a privately held company, does not disclose subscriber figures, but it attracted a mere 264,000 visitors last month, according to online measurement firm ComScore Media Metrix.

‘CinemaNow was looking to continue to raise funds independently,’ said Mark Ely, Sonic Solutions’ executive vice president of strategy. ‘Obviously, with the market today, it’s particularly difficult to raise capital. It became apparent that a good opportunity would be to combine the companies.’

Ely said CinemaNow would be combined with Sonic’s Qflix team to create a new, premium content group, which will continue to pursue CinemaNow’s strategy of embedding a video store on consumer devices.

‘We’re trying to essentially provide PC and consumer electronics manufacturers easily integrated software and services to enable movie downloads,’ Ely said.

--Dawn C. Chmielewski