Rovi to sell online movie store, previously known as CinemaNow, after just two years

US tech corporation Rovi has announced that it will be selling its Rovi Entertainment Store, formerly known as CinemaNow, which it bought just two years ago for US$720-million.

While the company didn’t disclose exactly which assets it wanted to offload in the sale, it did reveal that it wanted to hold on to its DivX video codecs and software business, which was also part of the US$720-million deal.

“The Rovi Entertainment Store has grown significantly since Rovi acquired it in February 2011, and we believe it will continue to grow and provide an excellent platform for on-demand media delivery as retailers and content owners move to distribute more content online,” said Tom Carson, President and Chief Executive of Rovi Corporation.

“However, we are working to drive Rovi’s future growth and increase operational efficiencies around a strategic plan building on our core assets and IP, and to ensure the management team is fully focused on that effort. We are aligning primarily around delivering enabling solutions for our service provider customers and using those efforts to also generate growth with our Consumer Electronics and other customers. Consequently, we have decided to sell the Rovi Entertainment Store business.”

CinemaNow powers US retailer Best Buy’s video digital download store but competing with the likes of Amazon and Apple’s iTunes was never going to be easy, as the service’s financials show.

That’s putting in its most simple terms however. In actual fact Sonic bought CinemaNow and then sold the brand name to Best Buy who used it for their consumer-facing movie service. As a result, Sonic renamed its white label service RoxioNow. Later, Rovi purchased Sonic and changed the name of the service to Rovi Entertainment Store.

Rovi claims that had the Rovi Entertainment Store business been reclassified as discontinued operations when Rovi provided its 2012 estimates during its latest quarterly earnings call such estimates would have been fiscal year 2012 revenue of between US$645-million and US$655-million. Rovi now estimates that fiscal year 2012 revenue will be between US$645-million and US$650-million.

CinemaNow was founded in 1999 and, according to GigaOm, at one stage had backing from the likes of Microsoft, Lionsgate and Cisco.