Rovi has announced its acquisition of Sonic Solutions this week, taking over the company known for its DVD editing and burning software, digital movie downloads and for DivX, the digital video software and codec.
The company will pay $720 million in cash and stock just six months after Sonic purchased DivX for $323 million.
Rovi says the merger will help “Hollywood studio clients sell content in a fast-growing digital entertainment market.”
Because the content will be more centralized, consumers may be willing to pay a premium for it, adds the company.
The deal should close in the first half of 2011 and consolidation should help save them $15 million in expenses per year.
Result for: hollywood studio
Think back a few months to a fight that took place between Redbox and the major Hollywood studios. Hollywood execs were all hot and bothered about how Redbox kiosk’s cheap $1 movie rentals were cannibalizing new DVD and Blu-ray sales, and decided to order their wholesale distributors not to sell to Redbox for a month or more after the initial release.
Redbox launched some legal action in response and decided to buy directly from retailers to stock kiosks as a workaround. However, that came crashing down for Redbox when Wal-Mart and other retailers imposed limits on the number of units of the same film a single customer can buy from them. Long story short, Redbox ended signing deals with Fox, Universal and Warner Bros. that required a 28-day window before Redbox kiosks could offer new titles for rental.
Paramount however decided to actually test whether or not the availability of new titles from rent from Redbox kiosks affects the sales of new DVD or Blu-ray releases. It signed a deal with Redbox in August 2009 which would allow it to stock new releases on the same day as the title comes out on Blu-ray and DVD. Redbox agreed at the time to share rental data with Paramount so that it could evaluate the potential benefits of a longer-term contract.
Following the 10-month analysis of DVD sell-through and renal performance, Paramount and Redbox announced on Tuesday that Paramount had extended its revenue sharing license agreement, providing Redbox access to Paramount DVD and Blu-ray titles to rent on the same day they are released in the sell-through market.
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Result for: hollywood studio
RealNetworks has announced that they have settled their outstanding lawsuits with the major Hollywood studios over their Real DVD ripping software, effectively killing the product off after making just 2700 sales.
Additionally, Real will pay $4.5 million to pay off the legal costs of the litigation.
“We are pleased to put this litigation behind us,” adds Bob Kimball, president and acting CEO for Real. “This is another step toward fulfilling our commitment to simplify our company and focus on our core businesses. Until this dispute, Real had always enjoyed a productive working relationship with Hollywood. With this litigation resolved, I hope that in the future we can find mutually beneficial ways to use Real technology to bring Hollywood’s great work to consumers.”
The settlement also terms a permanent injunction that will block RealDVD and similar technologies forever from sale in the US or abroad.
The $30 USD software application allowed users to make a copy of their DVDs and it play it back on their PCs, allowing for, what Real thought, were legal backups. Clearly, Hollywood did not agree, despite the fact that Real’s backups also included DRM to stop sharing of the backups.
