UPDATED: Blockbuster Expands Its Online Rental Plans

Update: We spoke with Sonic about the future of CinemaNow, new info. after the jump.

After watching Netflix storm this year’s CES by announcing a bunch of partnerships for its streaming movie service, Blockbuster is making its own digital distribution moves.

Blockbuster said today it will expand its online movie rental service reach to a number of Internet-connected consumer electronics devices through a new partnership with Sonic Solutions. Through this deal, Blockbuster movie rentals would be available through PCs, mobile phones, broadband TVs, Blu-ray disc players and more. Blockbuster will be providing the interface and Sonic will power the content delivery.

This is a fast way for Blockbuster to get up and running on a number of devices as Sonic, which purchased online movie service CinemaNow last November, has relationships with electronics makers such as Samsung, Dell, HP and TiVo.

Less clear is what this means for the CinemaNow, which had been trying to expand its own storefront presence on CE devices.

In November, Mark Ely, executive vice president of strategy at Sonic Solutions, told us his company bought CinemaNow “primarily due to their infrastructure and operational expertise, less about the amount of content they’re moving. The margin on Hollywood content is slim, we aren’t doing it for revenue.” Having Blockbuster’s brand recognition on the front end might help move the needle on the amount of content being moved. But might it bump CinemaNow altogether?

Hopefully, CinemaNow’s technical expertise will help Blockbuster in other ways. The 2Wire set-top box Blockbuster released before the holidays sported a number of irritating glitches that prompted Dave Zatz to banish his unit to the closet.

Update: I spoke with Sonic’s Mark Ely today by phone about the future of CinemaNow. “CinemaNow continues on as an operation,” said Ely, “and will continue to power movie services for a variety of other partners.”

Ely said that because CinemaNow offers both the technical infrastructure as well as the content, it can help CE manufacturers like TV makers get to market quickly. So expect to see a number of Brand X video “powered by” CinemaNow announcements in the coming months. But CinemaNow will also continue on as its own entity, acquiring content and operating its own site.

CinemaNow is also working with Blockbuster’s Movielink team (which Blockbuster acquired in 2007) to expand their technical offerings beyond downloads and into adaptive streaming. CinemaNow is powering Blockbuster’s streaming foray onto Vizio TVs.