Rovi to create Internet TV giant with Sonic acquisition

by Scott Bicheno on 23 December 2010, 10:07

Tags: Sonic Solutions, DivX, Rovi (NASDAQ:ROVI)

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A clear solution?

Online video networking and discovery company Rovi has announced its agreement to acquire Sonic Solutions, which includes the Roxio multimedia software division, and DivX - the video technology division, for $720 million.

You may not be massively familiar with either company, but this deal could well be quite significant. Internet TV has been one of the big growing tech trends this year, especially via the activities of Google and YouView. It's also set to be one of the major themes of the imminent CES, despite Google apparently stumbling with its TV initiative.

Meanwhile Rovi has been quietly getting on with making itself integral to the Internet TV experience. It does so by combining several services into a B2B solution. They include a white-label electronic program guide (TotalGuide), metadata (additional, cross-indexed info like descriptions, reviews and images), advertising and networking.

The parts of Sonic Rovi most covets are not the Roxio consumer video processing software, but DivX (which Sonic itself only recently acquired for around $320 million) and RoxioNow, which offers many similar solutions to Rovi, thus removing a competitor and gaining a bunch of partners at the same time.

DivX recently took the time to speak to to explain that it sees itself as much more than just a codec company. It is, inevitably, a ‘solution', and that's exemplified by the fact that it hosts entire video stores selling or renting DivX videos. It also has its own streaming video distribution offering - DivX TV.

"We believe Sonic has built an exciting portfolio that complements Rovi's TotalGuide as well as our broad portfolio of solutions," said Fred Amoroso, president and CEO of Rovi. "Together, we believe the two companies will be able to address the expanding digital entertainment market with unique capabilities that will bring enhanced value to consumers."

"The digital entertainment sector is transforming at a faster rate than just a year or two ago and consumers are seeking new ways to discover and enjoy digital content, specifically premium content." said Dave Habiger, president and CEO of Sonic Solutions. "For our Hollywood studio partners, eager to expand digital delivery, the larger footprint of our combined company enables them to market their content broadly."

So, in summary, this combined company could well be as significant to the development of Internet TV as Google or Apple. It already has the relationships with content providers, manufacturers and advertisers, and can already offer a number of innovative routes to market for content. We expect it to unveil a lot more at CES and the likes of Google need to either collaborate with Rovi or offer something significantly different.

We'll leave you with a video interview we did with Rovi earlier in the year.



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