Our take...
Since launching in 2000 CinemaNow has concentrated its efforts on the US online movie market, signing deals with all the major Studios. In contrast its international store has lacked any compelling content and CinemaNow has struggled to gain meaningful market share in any country outside its domestic market. The partnership with Winbox in Europe indicates an attempt to increase sales in the region by delivering content to the TV screen.

Screen Digest believes a device strategy is key to growing a successful online movie store – in order to generate large sales volumes a digital movie store should be closely integrated either with a portable device (to increase flexibility and portability) or a device capable of delivering content to the television set. However, Winbox and CinemaNow have not released full details of the STB and uptake will greatly depend on price and the existence of additional features. Consumers are reluctant to pay substantial sums for a STB whose primary function is delivery of transactional movie content – a reluctance aptly demonstrated by poor sales of the Apple TV. If VoD functionality is included as a secondary feature, for example on a games console or Blu-ray player, adoption is likely to be much higher.

By launching in the UK the CinemaNow/Winbox partnership is entering an online movie market dominated by Apple and Microsoft - Screen Digest estimates that between them iTunes and Xbox Live Video Marketplace capture over 80 per cent of UK online movie transactions. It seems unlikely that CinemaNow's store will gain a significant slice of the market, particularly if the quality of its catalogue is not improved.