Dear William,

We have some good news and some bad news. The bad news is that, as of 3/31/12, the Blockbuster app will no longer be available on your TiVo DVR. We are updating our technology platform and will not be able to continue supporting your device.

You won’t be able to watch movies from Blockbuster On Demand on your device, but you can still watch on any of our other devices or stream via PC or Mac. See a list of supported devices.

Your friends at Blockbuster

I spoke to TiVo on Friday, and they basically found out about this along with the rest of the world – the day before. Neither Blockbuster, nor parent Dish Network, had notified TiVo that this was coming. TiVo had just started discussions with Blockbuster after hearing the news, and those are still ongoing. TiVo says they’ll make a statement on this once they have something concrete to say.

The reason for this really has nothing to do with TiVo, or any of the other similarly impacted platforms that are losing Blockbuster. This all started back in 2007 when Blockbuster attempted to enter the digital movie market by acquiring Movielink. This attempt failed, so in 2009 they decided to try again by partnering with CinemaNow, which had just been acquired by Sonic. Ever since then Blockbuster’s download service has been powered by Sonic, which has since been acquired by Rovi.

Blockbuster’s deal with Sonic expires on 3/31/12, and they aren’t extending it. Since all of the current platforms that support Blockbuster’s download service use the Sonic implementation, they’re all going to stop working – and that includes TiVo.

While most Blockbuster On Demand products have been using the download service, for a while now Blockbuster has also had a streaming service. It is used primarily to support mobile devices and computers, although Samsung has been supporting it on some of their recent home entertainment products as well. It looks like Blockbuster is phasing out the download service completely, in favor of going streaming only.

This streaming service also provides hope for Blockbuster On Demand’s return to TiVo and other platforms. Samsung has already shown that home entertainment devices can support the service, and I suspect there is no technical barrier to bringing it to devices such as TiVo. However, presuming the business side of things is addressed, it will still require all new development to implement the streaming client for each platform. Given the time needed for development, and then testing, I wouldn’t expect to see anything in the near future.

Also, the streaming service isn’t going to support older hardware that can’t handle new codecs. That means, just like Netflix, Hulu Plus, YouTube, etc., it will never hit the older TiVo Series2 platforms. And while technical reasons will keep it off of the Series2, I expect business reasons will keep it off of the Series3 as well. Any new client development will almost certainly be done in Adobe Air in the new SDK, just as with Hulu Plus. This will only run on the new Series 4/Premiere hardware. Since the Series3 line is no longer produced and sold, there is really no justification for investing resources in developing an HME-based client just for that platform.

So Blockbuster On Demand is going away, but it may be back at some point – as a streaming app on the Premiere.

Blockbuster is partnering with Sonic to bring Blockbuster branded video services to consumers, including the existing CinemaNow content service. It sounds like win-win for Blockbuster and Sonic. Blockbuster gets a successful service which already has a number of deals with consumer electronics vendors, which Sonic gets the Blockbuster brand, which is still a fairly strong brand in the video rental market. It is also a pretty good deal for the CE vendors who have already made deals to bring CinemaNow content to their devices, as they get the strong Blockbuster brand.

I wonder if we’ll be seeing the Blockbuster brand on TiVo, since they currently use CinemaNow for Disney content, and more content is expected.

Jan 14, 2009 00:00 ET

Blockbuster and Sonic Solutions Team for Internet Movie Delivery

Alliance to give consumers instant access to Blockbuster digital movie service across extensive range of home and portable devices

MARIN COUNTY, Calif. and DALLAS, Jan. 14 /PRNewswire-FirstCall/ — Blockbuster Inc. (NYSE:BBI) (NYSE:BBI.B) , a global leader in entertainment, and Sonic Solutions (NASDAQ:SNIC) , the leading technology and service provider for premium movie content, today announced an alliance to give consumers access to a vast library of premium digital entertainment across a wide assortment of home and mobile electronic devices. Under the multi-year, preferred-provider agreement, Blockbuster will supply the branded consumer interfaces and Sonic will power content delivery across PC and consumer electronic devices.

The two companies are collaborating with a host of consumer electronic (CE) manufacturers, including Sonic’s existing CinemaNow providers, to expand the ecosystem of interoperable devices offering the Blockbuster service. These devices include PCs, portable media players, Blu-ray Disc players, personal video recorders (PVRs), set-top boxes, mobile phones and Web-connected television sets. Additionally, the two companies will make their digital libraries of mainstream content available under the Blockbuster brand resulting in one of the most expansive VOD (video on demand) and EST (electronic sell-through) offerings in the marketplace.

“We are excited to be partnering with Sonic, the industry’s leading entertainment delivery and technology provider, to make Blockbuster’s digital entertainment service easily and instantly available to consumers through the widest range of devices available in the marketplace,” said Jim Keyes, Blockbuster Chairman and CEO. “Blockbuster is a ubiquitous entertainment presence in the physical world. Through this alliance with Sonic, we plan to become a ubiquitous presence in the digital world as well. Our goal is to offer consumers the most digital content, the most accessibility, via the most devices, both in- and out of home.”

Sonic’s device ecosystem, powered by its new CinemaNow™ SDK (software development kit), will help streamline the introduction of Blockbuster’s digital entertainment service into a wide variety of consumer electronic devices, both Mac- and Windows-enabled, via adaptive streaming and progressive download. The devices will be sold through Blockbuster retail stores, blockbuster.com and other leading retailers.

“With more and more broadband-enabled consumer electronics hitting the market, there is a growing need for a service that gives consumers access to premium entertainment on any device, anytime and anywhere,” said Dave Habiger, president and CEO, Sonic Solutions. “By pairing Sonic’s digital delivery technology with Blockbuster’s trusted brand and library of content, we enable any CE manufacturer to add an impressive digital movie service to its product offerings and in doing so, create the most flexible digital entertainment service for consumers.”

About Blockbuster

Blockbuster Inc. (NYSE:BBI) (NYSE:BBI.B) is a leading global provider of in-home and portable movie and game entertainment, with more than 7,500 stores throughout the Americas, Europe, Asia and Australia. The Company may be accessed worldwide at www.blockbuster.com.

About Sonic Solutions

Sonic Solutions® (NASDAQ: SNIC; http://www.sonic.com/) enables the creation, management, and enjoyment of premium and personal digital media content through its Hollywood to Home™ products, services, and technologies. Sonic’s products range from the advanced authoring systems used to produce Hollywood DVD and Blu-ray Disc titles to the award-winning Roxio®-branded photo, video, music, and digital-media management applications, field-proven SDKs and services. Sonic’s Premium Content Group, which includes CinemaNow, is helping provide consumers convenient access to Hollywood entertainment for download and enjoyment on a broad range of digital devices. Sonic Solutions is headquartered in Marin County, California.

Forward-Looking Statements

This release may contain forward looking statements that are based upon current expectations, including the market acceptance and success of the alliance between Blockbuster and Sonic Solutions. Actual results could differ materially from those projected in the forward looking statements as a result of various risks and uncertainties. This press release should be read in conjunction with Blockbuster’s and Sonic Solutions’ most recent annual reports on Form 10-K, quarterly Forms 10-Q and other reports on file with the Securities and Exchange Commission, which contain a more detailed discussion of each company’s business including risks and uncertainties that may affect future results. Neither Blockbuster nor Sonic Solutions undertakes to update any forward looking statements.

Sonic, the Sonic logo, Sonic Solutions, Roxio, the Roxio logo, CinemaNow, and Hollywood to Home are trademarks or registered trademarks owned by Sonic Solutions in the United States and/or other countries. Blockbuster, the Blockbuster logo, blockbuster.com and Blockbuster Online are trademarks or registered trademarks owned by Blockbuster Inc. in the United States and/or other countries.

All other company or product names are trademarks of their respective owners and, in some cases, are used under license. Specifications, pricing and delivery schedules are subject to change without notice.

Source: Blockbuster Inc.; Sonic Solutions

CONTACT: Karen Raskopf, karen.raskopf@blockbuster.com, or Randy
Hargrove, randy.hargrove@blockbuster.com, both of Blockbuster Inc.,
+1-214-854-3190; or Chris Taylor of Sonic Solutions, +1-408-367-5231,
chris_taylor@sonic.com

Web Site: http://www.blockbuster.com/
http://www.sonic.com/