Sears, Kmart to sell movies, music online

By Reuters
Posted June 22, 2010 at 8:15 a.m.

Sears Holdings Corp. Tuesday became the latest retailer to partner with digital media company Sonic Solutions to sell movies and television shows through an online Web site. Under Sonic’s latest multiyear deal, the operator of Sears and Kmart stores has licensed Sonic’s RoxioNow platform to sell digital entertainment under the Sears and Kmart brand names.
Sears is expected to launch the portal later this year, which will allow consumers to access Hollywood content on TVs, Blu-ray players and mobile phones.

“This is an opportunity for Sears to get their consumers up and running with digital content, and offset what is happening as consumers move from physical media to digital delivery,” said Mark Ely, executive vice president of strategy for Sonic.

The California-based Sonic has similar deals in place with Blockbuster Inc and Best Buy Co. Inc.

Sonic this month reported net revenue of $104.3 million for the last fiscal year. The company allows consumers to access its online portal for buying and renting movies and TV shows, through its built-in technology on televisions and Blu-ray players from manufacturers such as LG Electronics Inc and Samsung Electronics .

Sears Holdings already sells some of those devices at its stores. But the latest partnership will allow the retailer to create its own online platform to sell Hollywood content, just as Wal-Mart Stores Inc has done with its purchase of the video-streaming service Vudu.

“Teaming up with Sonic is a great opportunity for Sears and Kmart to quickly establish a position in digital video entertainment,” Karen Austin, president of home electronics for Sears Holdings, said in a statement.

Ely said only 3 to 5 percent of consumers who buy TVs and Blu-ray players equipped with Sonic Solutions’ technology actually connect online to the portal, where they can buy and rent content.

Sonic hopes its deals with retail outlets such as Best Buy and Sears Holdings will increase consumer awareness, and drive more consumer adoption of RoxioNow.

The Hollywood studios that create the movies and TV shows sold through Sonic’s RoxioNow platform typically reap at least 70 percent of sale proceeds, with Sonic and its retail and manufacturing partners sharing the rest.

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