Sonic Completes DivX Acquisition

Combination Will Accelerate Industry Transition to Online Video Delivery.

Sonic Solutions today announced that it has completed the acquisition of DivX, Inc., based in San Diego, California. The addition of DivX brings widely deployed digital media technologies, an embedded CE footprint of over 300 million devices, a strong consumer brand, and a global market presence to Sonic’s expanding position as the leading supplier of services and technologies for the distribution of premium video content over the Internet.

"The acquisition of DivX accelerates our vision to make accessing entertainment over the Internet directly from home and mobile devices as pervasive as physical disc consumption is today," said David Habiger, President and CEO of the combined company. "With DivX, we instantly add hundreds of millions of consumer electronics devices to our footprint; make it faster and more efficient for device manufacturers, retailers, and Studios to launch digital services; and increase our global reach, particularly in the European market."

As the world’s foremost developer and supplier of professional DVD and Blu-ray authoring systems, Sonic has worked with Hollywood for more than a decade to bring movies to consumers. Sonic’s Roxio® division leads the industry for consumer media creation and management applications with hundreds of millions of units shipped. Sonic’s RoxioNow™ division develops and licenses a universal "over-the-top" video platform for retailers, Hollywood Studios, consumer electronics manufacturers, and PC OEMs to offer movies and TV shows over the internet. Major retailers – Best Buy, Blockbuster, Sears/Kmart, Cineplex Entertainment, HP, Dell and many others – today license RoxioNow to power online video stores, while CE companies – Fujitsu, Funai Electric, LG, Panasonic, Pioneer, Samsung, Sony, and others – embed the RoxioNow platform in over 350 product models.

The acquisition of DivX brings Sonic a vast installed base of CE devices, all of which ship with Digital Rights Management (DRM) for the secure playback of Hollywood movies even when not connected to the Internet. DivX’s DRM, an important ingredient for the secure distribution of copyrighted video content, has been approved by major Hollywood Studios. DivX’s H.264 video encoding tools serve as the de-facto standard for a wide variety of premium content stored in "the cloud" for delivery over the internet. Finally, DivX’s strong global presence and recognized brand will speed Sonic’s expansion into more geographical markets.

"Our strategy is to deliver all the backend pieces that make it easy for Studios, retailers, and device manufacturers to offer over-the-top, premium entertainment experiences," said Mark Ely, newly appointed, President, Strategy, Sonic Solutions. "We are the only company that has a true ‘plug and play’ solution for partners interested in putting custom-media storefronts on connected consumer electronics. The addition of DivX increases our capacity and capabilities, provides a solution for non-connected devices, and brings us even closer to satisfying consumers’ desire to have their Hollywood entertainment wherever, whenever, and however they want."

"DivX and Sonic are a tremendous fit," said Tim Bajarin, Principal Analyst, Creative Strategies, Inc. "For CE, PC and mobile manufacturers, the Sonic-DivX combination means that they can license a single solution which can be used to deploy multiple content stores rapidly across an expanding ecosystem of devices. For retailers, it means that they can more easily create their own branded stores and rely on Sonic to provide all the under-the-hood technology. And, for the content community, Sonic plus DivX helps them directly connect to consumers."

"Our partners have responded very positively to the news of the union between Sonic and DivX," said Matt Milne, Executive Vice President and General Manager, DivX. "Moving forward, the combination of the installed base of DivX Certified products and the industry-leading RoxioNow content platform will greatly enhance the services and support we can offer partners, as well as expand the choices consumers have for the consumption of high-quality digital entertainment."

The shareholders of both Sonic and DivX separately approved the merger that was previously announced by the two companies on June 2 of this year.



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