CinemaNow or never: Rovi puts its digital movie store up for sale


After having spent $720 million on it two years ago, Rovi (s ROVI) announced Thursday that it intends to sell its Rovi Entertainment Store digital video platform, which was formerly known as CinemaNow.

The company said that it has retained GCA Savvian Advisorsto to facilitate the sale. It didn’t disclose all the assets to be included in the sale, but a spokesperson confirmed that it wants to hold on to its DivX video codec and software business, which was also part of that $720 million acquisition.

Rovi’s video platform powers Best Buy’s (s BBUY) digital download store, which competes with iTunes, (s AAPL) VUDU (s WMT) and Amazon (s AMZN) for a piece of the transactional VOD cake. Except it apparently didn’t fare very well in doing so: In the first three quarters of 2011, Rovi generated around $54 million in revenue from its Entertainment Store and related assets. That’s around 10 percent of the company’s total revenue, according to its last earnings report.

The sale is the latest in a turbulent history of a would-be iTunes competitor that changed focus and hands multiple times over the last few years: Cinemanow launched in 1999 as one of the first digital storefronts for movies online. The company chugged along for some time, and even secured backing from Microsoft, (s MSFT) Cisco (s CSCO) and Lionsgate.

But it eventually lost out to bigger names like iTunes and Amazon, and got sold to Sonic Solutions in 2008. Sonic transformed CinemaNow into a white-label platform for companies like Best Buy and Blockbuster, and got picked up by Rovi for $720M in late 2010.



What a load of crap! The Rovi Entertainment Store has never really worked and was impossible to implement! Anyone dumb enough to buy this “product” from Rovi deserves to be ripped off. Potential buyers beware, and ask them how many stores they actually launched with any success.


Rovi’s Video Store also powers the Video Store on the BlackBerry PlayBook, and is supposed to also be the source of videos in the new version of BlackBerry App World coming out with the BlackBerry 10 phones.

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