News : Small movie software firm gets Hollywood traction

By Sue Zeidler

LOS ANGELES (Reuters) - Media software company DivX Inc said on Tuesday it signed deals to digitally distribute films for Lions Gate Entertainment Corp and Paramount Pictures, bringing the total number of Hollywood studios to embrace its technology to four.

The small San Diego-based company, which aims to compete in the movie download business currently dominated by Apple Inc's iTunes, has also signed deals with Time Warner Inc's Warner Bros and Sony Corp's Sony Pictures. Paramount is a unit of Viacom Inc.

Through deals with consumer electronics companies, DivX licenses digital video technologies to an estimated 200 million consumer electronics devices.

Its agreements with Hollywood pave the way for consumers to have the freedom to watch these movies on millions of these devices that have shipped worldwide, a spokeswoman said.

DivX is expected to soon reach a deal with a U.S. retailer and said recently it will launch a U.S. site shortly.

So far it has signed agreements with three European online storefronts that let viewers download movies and playback on any DivX certified device.

Hollywood studios are anxiously expanding their digital footprint through various outlets as physical DVD sales slow and as they seek greater leverage in negotiating licensing deals with Apple.

"In partnering with DivX, we are ensuring that our films are made available to video-on-demand sites in a secure, high- quality format," said Curt Marvis, President of Lionsgate Digital Media.

"It's important to us that Lions Gate fans enjoy the same cinematic viewing experience watching our movies at home or on the go as they do in the theater. The DivX format enables us to do that.

"As our fourth format approval agreement with a major motion picture studio, this agreement demonstrates the traction we are gaining in making premium Hollywood content available to DivX consumers worldwide."

(Reporting by Sue Zeidler; editing by Andre Grenon)