Best Buy extends online streaming into Canada

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As the entertainment industry continues with its rapid shift to digital media, Best Buy is to launch its CinemaNow video download service in Canada.

The service, due to launch in August, will be available via the web and expanded to TVs, mobile devices and games consoles later in the year. Best Buy introduced this service to the US in May 2010 and has an online library of about 1,500 titles for download or rent.

Digital services such as online video are poised to experience rapid growth over the next few years. In Canada Best Buy will compete with US-based market leader Netflix, which expanded there last year. The key difference between the two is that Best Buy offers an à la carte service more akin to that of Apple, whereas Netflix has relied on amassing subscribers for its video streaming.

It is a model that has worked well for Netflix, which grew sales by 34% during 2010 to reach $2.27bn (£1.47bn). The company has gained credibility with film and TV channels and is continuing to widen its offering through new streaming deals. This year Netflix expects to make two new market entries.

There are rumours that Netflix may be eyeing Europe for future expansion, although this market is being closely guarded by Amazon subsidiary LoveFilm, which recently became the first company to negotiate European streaming rights with Disney. LoveFilm has also signed up with Sony to offer movies from the PS3, both in the UK and now Germany. Like Netflix, LoveFilm is keen to get access to its service from as many connected devices as possible.

Movie companies are also getting in on the act. This week Warner Brothers announced plans to enter the pay-per-view market in China by setting up a joint venture company with the Chinese government.

As competition hots up in the digital market, more traditional DVD rental services will come under increasing pressure. Without embracing new technology they will find themselves in trouble, particularly Blockbuster, which was recently saved from bankruptcy in the US by new owner Dish Network.

With the expansion of broadband we can expect to see new digital video services cropping up and closer integration with social media sites such as Facebook, whose chief executive Mark Zuckerberg has said that music, TV shows and books would be among the next products to become ‘social’ through its site.