Sears, Kmart Debut Over-The-Top Movie Service

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Sears and Kmart are the latest over-the-top threats to pay-TV providers' video-on-demand businesses.

Sears on Tuesday officially launched its online movie download service, Alphaline Entertainment, which will let Sears and Kmart customers rent or purchase movies, including on the same day they are released on DVD and Blu-ray Disc, provided through digital media services firm Sonic Solutions.

Sears' Alphaline service

Titles currently available to rent or buy from Alphaline include The Town, Inception, Resident Evil: Afterlife, Easy A, Salt and Legend of the Guardians. TV shows available to download-to-own include Mad Men, The Closer and Nurse Jackie.

Under Sonic's multiyear agreement with Sears, the companies will provide access to Alphaline services through multiple devices including Blu-ray Disc players, HDTVs, portable media players and mobile phones.

"Collaborating with Sonic provides a great opportunity for Sears and Kmart to launch digital services for customers seeking even faster access to the latest in home entertainment experiences," Karen Austin, president of consumer electronics for Sears and Kmart, said in a statement. "We'll continue to increase the reach and flexibility of the Alphaline Entertainment service by providing consumers on-demand access to the latest entertainment from a range of home and mobile electronics."

Sears, which merged with Kmart in 2005, is the fourth largest retailer in the U.S. The company has about 3,900 department stores and specialty retail stores in the U.S. and Canada.

Last week, Rovi announced plans to acquire Sonic Solutions for $720 million in stock and cash.

Best Buy also is a Sonic customer, and the electronics retailer offers downloads through the CinemaNow brand. Sonic has distribution agreements with each of the major Hollywood studios, including the Walt Disney Co., Paramount Pictures, Warner Bros., Universal Pictures, 20th Century Fox, Sony Pictures Entertainment and Lionsgate.

Meanwhile, Wal-Mart Stores -- the biggest U.S. retailer -- earlier this year acquired Vudu, which provides HD movies for rent or purchase through various consumer-electronics devices.

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