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Video Interview: CinemaNow Could Look Beyond Sales, Subscriptions

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Sonic Solutions CEO Dave Habiger thinks that consuming movies online is about to become mainstream any day now. Habiger, whose company bought the movie rental site CinemaNow in 2008, stopped by our office yesterday to tell us why he is optimistic about Internet-based movie delivery despite lackluster sales, and how he plans to take on big players like Amazon (s AMZN), Apple (s AAPL) and Wal-Mart (s WMT).

Not shares Habiger’s optimism. ScreenDigest estimates that the industry only made $291 million from download-to-own sales and Internet VOD in 2009, according to a report from Paidcontent. ScreenDigest also lowered its expectations for future online video growth, now forecasting that the industry will only make $943 million in 2014 from Internet VOD and download-to-own sales.

Habiger was ready to admit that online video sales have historically been small, but said that there is a lot of potential for growth, given the fact that the physical disc market has been about $45 to $50 billion per year. He also added that there is going to be much more content available online this year than in previous years — and that content will be available on more and more devices.

Still, one has to wonder whether the original model of paying $4 per rental will ever work online, given the fact that it’s hardly working for your neighborhood Blockbuster anymore. Add to that the fact that Neflix (s NFLX) is getting lots of interest for its Watch Instantly feature and Hulu is clocking more than a billion video views per month, and you have to wonder if a company like CinemaNow shouldn’t look at other models.

Habiger seemed open to exploring different models, calling subscriptions or VOD “just words that describe (what) historically (has been) a disc market.” He added that Cinemanow would be open to try any combination of existing and new models to deliver content: “There aren’t any rules that say you can’t rent something for three days or four days or put it in your digital locker for three years.”

Sonic Solutions bought CinemaNow at the end of 2008. The company has since licensed its platform to Blockbuster (s BBI) as well as Best Buy (s BBY) to power their branded video download platforms. It’s also expected to be an integral part of the new partnership between Best Buy and TIVO (s TIVO).

Related content on GigaOm Pro: For Wal-mart, There’s More to Vudu Than VOD (subscription  required)

5 Responses to “Video Interview: CinemaNow Could Look Beyond Sales, Subscriptions”

  1. It’s a great interview, but Habiger is delusion. He seems to feel that with $45 billion in discs that it will translate into $45 billion in digital. People are flocking to Netflix and Redbox because they are cheap and that is canibalizing that $45 billion opportunity. 2008 wasn’t some kind of weird aberration, it’s what the future will look like. People have stopped buying DVDs because they are way overpriced. People won’t buy Sonic digital movies because they’re trying to charge the same prices. For him to put his faith in “windows”, “availability” and more “digital rights” is misguided optimism at best. Consumers want value and until Cinema Now can provide that, they’ll continue to be ignored by the public. If Sonic really is doing so well, why won’t Habiger release the revenue numbers for what they are bringing in for digital sales and the number of movies sold? Nice dog and pony show, but he should put up or shut up if he’s going to try and sell their solution as a multi-billion dollar opportunity.