Blog Post

Rovi May Finally Get On CE Devices Through Sonic Buy

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Rovi (s ROVI) has long tried to convince consumer electronics manufacturers to let it power program guides on their connected devices. Well it could soon have some technology embedded on TVs, Blu-ray players and other broadband-connected CE products, thanks to a planned acquisition of digital video specialist Sonic Solutions. (s SNIC)

Rovi announced plans to acquire Sonic on Wednesday in a deal valued at $720 million, or a 38 percent premium over its 30-day average. According to the terms of the acquisition, Sonic shareholders can choose to receive either $14.00 or 0.2489 shares of Rovi common stock for each share tendered and accepted in the exchange offer. Once that exchange offer is complete, Rovi plans to acquire any outstanding shares of Sonic common stock and make Sonic a wholly owned subsidiary.

Rovi provides metadata and electronics program guide solutions to service providers looking to fill out information about content available through their program lineups and on-demand libraries. But over the last few years, it has attempted to reposition itself to provide similar data and technology to consumer electronics manufacturers that are introducing over-the-top video services on their connected devices.

In July 2009 it introduced a new programming guide technology for connected devices called Liquid — later dubbed TotalGuide — but despite signing up some content partners for the guide, it has yet to announce many actual customers. The one customer it did announce with the rollout of the Liquid guide two summers ago was Blockbuster On Demand, which was using the guide to integrate services like YouTube and CinemaNow. But the Blockbuster technology — and CinemaNow (now called RoxioNow) video on demand service — was essentially run by Sonic, which acts as a white-label video distribution service for some major brands and CE makers.

In addition to Blockbuster, Sonic’s RoxioNow platform also powers over-the-top video services for companies like Best Buy, (s BBY) Sears Holdings (s SHLD) and others, and as such has found its way onto a number of connected devices already. In its press release, Rovi says the RoxioNow platform will be embedded on more than 30 million connected devices by mid-2011. Through its acquisition of DivX earlier this year, Sonic — and now Rovi — also has access to an additional 300 million already shipped devices that support the DivX video format.

This isn’t the only acquisition Rovi has done this year: In May, it announced the purchase of MediaUnbound, which provides media recommendation technology. Now with its own metadata, MediaUnbound’s recommendation engine and Sonic’s existing footprint with device manufacturers, Rovi may finally get some customers for the program guide technology it’s been building for the last few years.

Related content on GigaOM Pro: (subscription required)

6 Responses to “Rovi May Finally Get On CE Devices Through Sonic Buy”

  1. Dan, I’m not really excited to engage in a comment debate, and I’m certainly not going to comment on a deal that hasn’t yet closed, but you’ve decided to change the topic midway by defining the word success.

    Ryan implied that we can’t get our technology into CE products.

    I replied that we supply the guides and metadata for Samsung, Sony, and others comprising the largest CE TV manufacturers in the world. I’m not about to discuss what each pays for that technology and data, but considering our company has met or beat performance expectations, and almost doubled in value in a year’s time, I would say that we have been successful. Yes, I understand you want some breakout. It isn’t going to happen here.

    Happy Holidays,

  2. Hi Richard, have to agree with Ryan on this one. To date, I don’t know of any metrics Rovi has offered the market to allow us to determine what you classify as a “great success”. If you have such metrics, revenue numbers, or some kind of breakout, I’m sure we’d love to hear more about it. Sony, Samsung etc… are all great customer names, but what’s the real value to Rovi in terms of dollars? Adoption? Devices? etc… there needs to be some metric for the market to determine what the real “success” is.

    My personal opinion, Rovi completely overpaid for Sonic. We always hear them use the name Blockbuster and BestBuy but what have those companies done in the digital space in the past 2 years? Almost nothing. They have had not impact on the market at all. Rovi is spending a lot of money betting on the future.

  3. Hey Ryan,

    This phrase “Rovi has long tried to convince consumer electronics manufacturers to let it power program guides on their connected devices” perhaps implies we’ve tried unsuccessfully. (maybe it’s just the word “tried”) I just wanted to make sure you know that we already provide guidance technology and metadata to Sony, Samsung, Pioneer, Panasonic, Visio, LG…I mean, we’re very excited about the new capabilities Sonic brings, but we have had great success in the CE space already.

    We could talk more about it when you have time.
    -Richard Bullwinkle
    Chief Evangelist, Rovi

    • Ryan Lawler

      Richard, I appreciate the response. Frankly, we’ve been talking to Rovi for a while, but this is the first time I’ve seen you name CE manufacturers you’re working with — at least in discussions with me. Would love to discuss after the holidays and get more granular about what you’re offering to these companies and how they’re using your technology.

      • Perfect! I would really enjoy such a discussion, because I actually read you regularly and value your insight. If you’d like to come by and visit us at CES, I’ll show you specific products on specific devices, or if you want to do a phone conversation, that works great, too. I know CES gets very busy!

        -Richard Bullwinkle
        [email protected]