Best Buy Launches Online Video ServiceBest Buy Launches Online Video Service

Best Buy on Tuesday launched its CinemaNow online service for renting and buying movies and TV shows, taking the consumer electronics retailer into competition with Apple iTunes and Amazon.

CinemaNow is a partnership between Best Buy and Sonic Solutions, which bought the original online movie distributor of the same name in March 2009. Best Buy says it now owns the CinemaNow trademark.

The service, which is powered by Sonic's RoxioNow technology platform, will initially be available on Internet-enabled, LG Electronics Blu-ray Disc players and home theater systems. Best Buy plans to offer the service through other devices from various manufacturers, including Insignia, later this year.

People with a PC or Mac have been able to rent or buy movies from CinemaNow over the Web for quite awhile. Through the Best Buy partnership, Sonic is letting the retailer expand the service into consumer electronics, a strategy also being pursued by such movie rental services as Netflix and Blockbuster, as well as Apple and Amazon.

Wal-Mart is also pursuing a similar strategy. The world's largest retailer announced in February that it would acquire online movie service Vudu, which also is pursuing partnerships with manufacturers of Internet-connected devices.

Best Buy plans to use in-store promotions to market CinemaNow. The retailer said a new version of the service would be launched later this year and would include an "advanced user interface and expanded video playback features."

CinemaNow is not Best Buy's first entry into online entertainment. The retailer bought music service Napster in 2008 for $121 million. Napster began life as a peer-to-peer file sharing service of dubious legality and later evolved into a publicly traded seller of fully licensed digital music tracks.

Research has shown that a growing number of people want to access the Internet through the consumer electronics, particular their digital TVs. More than a quarter of all TVs sold in January in the United States were connected to the Internet, according to iSuppli.