Sonic, SNIC, is the most exciting stock I know and here's why:
We are in the very early stages of a revolution in which on-demand premium entertainment is becoming available on a multitude of internet-connected devices. Most agree that this will be the norm in the future, a mega billion dollar industry. The public wants it--anthing, anytime, anywhere. Not restricted by cable offerings. Not limited by store availability. Not restricted by device (ie Iphone, Ipad). Instant access to live events anywhere. Instant access to archived movies and TV shows of all kinds. And it is becoming relatively easy to do. No more is this just for videophile geeks. No more is this holy grail of entertainment 10 years away. Within 2-3 years this relatively simple access will be on over 100 million devices in America. And, the technology limitations of the past are fast disappearing: Within seconds, a Cinema-Now powered movie now begins streaming smoothly, and with good quality.
Most importantly, the content makers want this. Studios are motivated to speed up adoption with the decline in DVD sales and the promise of bigger margins with digital delivery.
So, why Sonic?
*CinemaNow has long experience as the first movie download service launched 10 years ago, and Sonic has experience in managing content from Hollywood to home on PCs and CE devices, built from over $300 million in R&D. The company says it would be very difficult for anyone to replicate the platform that they have built. Their experience and the very clear fact that no one has replicated it to date supports their view.
*They are the only company that has a platform being offered to retailers to deliver premium content on demand via internet connected devices. Netflix, Vudu, Boxee, Popcorn, Amazon, and some others have their own platforms but they are all powering one storefront--their own. Sonic has agreements with over a dozen retailers--some already delivering content now.
*The platform Sonic has is similar to the platform the DECE appears to be working toward for the future of the industry. Sonic, as a member of the DECE, seems to be in a position that could end up being enormously beneficial to them, as Sonic currently gets a transaction fee on every purchase that moves through their platform.
*Sonic has stated that their platform might be used in the future by other 'microsites' that offer storefronts, presumably because Sonic is the one with the complete solution to allow access to multiple devices in a way that would conform to the DECE standards.
*Sonic will be powering the digital storefronts for BestBuy. Given the fact that BestBuy is the largest electronic retailer they have a great deal of clout to get their storefront on the devices that they sell.
*A Sonic powered storefront was on over 1 million devices at year end, and they project to be on over 3 million by June and 30 million by June 2011. Their goal is to be on every internet connected device that BestBuy sells.
*Sonic is powering the digital storefronts for Blockbuster. The brand name is quite valuable and is synonymous with both wide selection and the latest hits. This should (and the results confirm so far) be very beneficial when they are side by side on devices that include Netflix, which does NOT offer premium movies for streaming.
*Sonic has agreements with a number of other significant retailers to either power their storefronts on devices: Warner Direct, Disney on Tivo, Zip.ca (Canada's largest DVD by mail co), Cineplex (Canada's largest motion picture exhibitor), and Divx.
*Sonic has agreements with a cable-alternative, Sezmi, through which customers can receive at a lower suscrpition price all of the region's over-the-air TV stations (their high-def main channels, plus their digital subchannels), Web video (including CinemaNow), on-demand content and -- here's the rub -- 15 cable channels, including USA, TNT, Discovery, MTV and CNN. variety.com
*Sonic has agreements with Entone to offer telecommunication operators a comprehensive entertainment solution that combines live broadcast TV and DVR capabilities with instant access to OTT (over-the-top) entertainment powered by Roxio CinemaNow™.*
sonic.com
*BestBuy is said to be highly supportive of the new TIVO devices which are a bridge to cable companies that wish to offer more internet video to their customers.
*Sonic has teamed with Invidia to enable 3D viewing of premium movies sonic.com
*Sonic is said to be talking with Redbox to enable streaming of movies to be made available for a sub $5 montly suscription service. The analyst suggested that Coinstar may want to buy Sonic at some point (don't count on it..) homemediamagazine.com
*Sonic owns Qflix, the only industry approved method for creation of DVDs on demand. Since the move to digital will not be overnight, this MAY become increasing significant over time, if a person wishes to have a hard copy of his digital content stored in the 'cloud'. Even now we have content being manufactured on demand using Qflix, from Amazon's CreateSpace, and Warner Bros on Demand service.
There is plenty more, of course. Newbies may want to check out these 2 links:
sonic.com
img.roxio.com
as well as the recent Roth Conference webcast.
For those looking for a short term play only, I think you'll miss a huge long term opportunity, but the timing IMO is excellent for the very near future, as the company is presenting at a number of conferences, and -- more importantly -- the BestBuy launch is expected very soon: homemediamagazine.com BestBuy is the largest retailer of electronics in the US. |
