Connecting with… Sonic Solutions' Mark Ely

Q&A: Sonic will be 'key piece of the infrastructure for getting content to the home'

By Jennifer Netherby -- Video Business, 8/14/2009

VB: During the first half of this year, Sonic and most of your competitors announced a string of partnerships to get digital movies to the TV by the end of the year. Roxio CinemaNow has partnerships now with Blockbuster, Best Buy, TiVo, LG, etc. What are we going to see when these all launch?

Ely: What you’re going to see are a couple of things. You’re going to see CinemaNowas a branded storefront that will show up on consumer electronics devices like the LG Blu-ray player and forthcoming devices from other consumer electronics manufacturers. You’re also going to see CinemaNow powering the services that are provided by Blockbuster, devices like the various Samsung devices, Vizio devices and other ones that Blockbuster has announced. You’ll see us essentially as a key piece of the infrastructure for getting content to the home. You’ll also see us powering Web sites from studios like Warner Bros. and Lionsgate, enabling digital downloads from their Web sites.

VB: Who is the digital consumer these days?

Ely: If you asked me a couple of years ago, it would have been a different answer. The digital consumer two or three years ago was somebody who was watching movies on their PC or was trying to get their content to a mobile device. It was kind of an early-adopter crowd.

The digital consumer today, and the consumer we’re going to see over the next couple of years, is the average consumer, it’s the broadband homeowner who has got a flat-panel television set in their living room. That’s what the big leap is going to be over the next year or so. These Internet-connected services are just going to show up on devices you already buy. So if a consumer goes and buys a flat-panel television next year or even this year, chances are it’s going to come with some Internet services built in. By connecting that TV set to the Internet, to your broadband connection just like you would a laptop or your iPhone or whatever, you have enabled that television set for digital content.

As long as that content is a remote-control click away for the consumer, it makes it easy enough for them to acquire and consume that content. You don’t have to know how to network; you don’t have to know how to format content or transfer it between devices. So all the hurdles that had existed are now going to fall away.

VB: One of the hurdles to digital download adoption has been that consumers are limited in where they playback content. Does the growing number of Internet-connected devices in the home encourage the industry to come together to ensure interoperability of devices and content through something like the cross-industry consortium Digital Entertainment Content Ecosystem (DECE)?

Ely: At Sonic, we’re really big supporters of DECE and are participating in that initiative, but the end goal you have to think about is that consumers can easily move their content between devices, a vision we absolutely share with DECE. I think that doesn’t necessarily mean you have to have common DRM and common codecs. What it does mean is you have to have an online service or set of services that are available on a cloud that know who the user is and know what their devices are and then allow that user to get the content they want in the place they need in the time that they need it.

VB: Apple has dominated downloads up to this point, but it hasn’t moved into the living room in a big way. Does moving to the living room change the digital playing field?

Ely: The reason Apple dominates digital downloads today is because of the iPod and the iPhone, and they have an excellent service. The iTunes store is an excellent storefront, and it’s just so ubiquitous. If you have an Apple portable media player, you have access to their storefront and that will continue to be successful and continue to grow for Apple, but I think the dynamic is a little different. What Apple’s selling to right now is the iPod crowd, and I think the audience we’re looking to sell to isn’t the iPod crowd; it’s essentially the living room crowd. … The companies that are successful in that space right now are the cable companies, the companies that provide direct access to movies. That’s where I really think the competition is going to be. It’s less about competing with Apple and more about competing with the traditional digital delivery systems that go into the home living room.

VB: Sonic has partnered with Best Buy and Blockbuster. What role do traditional retailers play in the digital future?

Ely: Traditional retailers have a major role to play. That role is as educators, a key educator, for the space. If you look at a company like Best Buy for example, what they’re doing is beginning to merchandise and market home networking products in the home stereo section, not just in the computer section. They’re taking a leap, saying to get consumers to access this content digitally, we need to be able to tell them they can network their television set. That’s a whole new idea, the need to tell them what devices are compatible with each other and which ones support CinemaNow and how do they get content onto their mobile devices, etc. So, there are a lot of roles that the retailer can play, but I think the key one is to be educating consumers.

VB: What’s in it for them to educate consumers on digital movies?

Ely: There’s an opportunity in that you get a whole new range of connected consumer electronics devices, and that should be good business for the retailers.