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LOS ANGELES, July 12 (Reuters) - Online movie service CinemaNow Inc late on Wednesday said it raised $20 million in financing from new investors including satellite TV provider EchoStar Communications Corp (DISH.O: Quote, Profile, Research) to help fuel growth.
CinemaNow Chief Executive Officer Curt Marvis told Reuters the company would use the money to fund general purposes and seize on opportunities to expand its business in the future.
The link with Echostar also means CinemaNow can access 12 million subscribers on the DISH television service as EchoStar launches new set-top boxes that are connected to the Web and allow for downloading or streaming movies straight to TV sets, Marvis said.
"If we are going to build deep relationships with these companies, they want to know we have the working capital" to fuel growth, Marvis said.
Along with Echostar, a major investor in the new preferred stock financing was Japan's Index Holdings. Marvis said EchoStar and Index would each have one seat on CinemaNow's board.
CinemaNow's current major investors include movie studio LionsGate Entertainment Corp (LGF.TO: Quote, Profile, Research) (LGF.N: Quote, Profile, Research) and northern California-based venture capital firm Menlo Ventures.
Echostar, Lionsgate and Menlo would be the companies' largest investors. Other investors include technology provider Cisco Systems Inc (CSCO.O: Quote, Profile, Research) and software giant Microsoft Corp (MSFT.O: Quote, Profile, Research) and Japan's Transcosmos Inc.
CinemaNow was formed in 1999, and it sells and rents films online via its Web site, cinemanow.com.
The market for legal movie downloads is still small and only a few competitors like Movielink, Vongo and BitTorrent exist, but industry watchers and Hollywood's studios believe the arena may one day eclipse DVD retail and mail services like Blockbuster Inc (BBI.N: Quote, Profile, Research) and Netflix Inc (NFLX.O: Quote, Profile, Research).
It has only been in recent months that Hollywood's major studios have been allowing users to buy movies and store them permanently on computer hard drives. Until then, the studios were worried about piracy and would only let users "rent" films that could be stored for a short time on computers then automatically deleted.
"The financing validates that we are a serious player, an aggressive player and a leading player in the space," Marvis said.
He added that the ability to buy the films and permanently store them has boosted user traffic and revenues at the site, but he did not disclose specific numbers.
LOS ANGELES, July 12 (Reuters) - Online movie service CinemaNow Inc late on Wednesday said it raised $20 million in financing from new investors including satellite TV provider EchoStar Communications Corp (DISH.O: Quote, Profile, Research) to help fuel growth.
CinemaNow Chief Executive Officer Curt Marvis told Reuters the company would use the money to fund general purposes and seize on opportunities to expand its business in the future.
The link with Echostar also means CinemaNow can access 12 million subscribers on the DISH television service as EchoStar launches new set-top boxes that are connected to the Web and allow for downloading or streaming movies straight to TV sets, Marvis said.
"If we are going to build deep relationships with these companies, they want to know we have the working capital" to fuel growth, Marvis said.
Along with Echostar, a major investor in the new preferred stock financing was Japan's Index Holdings. Marvis said EchoStar and Index would each have one seat on CinemaNow's board.
CinemaNow's current major investors include movie studio LionsGate Entertainment Corp (LGF.TO: Quote, Profile, Research) (LGF.N: Quote, Profile, Research) and northern California-based venture capital firm Menlo Ventures.
Echostar, Lionsgate and Menlo would be the companies' largest investors. Other investors include technology provider Cisco Systems Inc (CSCO.O: Quote, Profile, Research) and software giant Microsoft Corp (MSFT.O: Quote, Profile, Research) and Japan's Transcosmos Inc.
CinemaNow was formed in 1999, and it sells and rents films online via its Web site, cinemanow.com.
The market for legal movie downloads is still small and only a few competitors like Movielink, Vongo and BitTorrent exist, but industry watchers and Hollywood's studios believe the arena may one day eclipse DVD retail and mail services like Blockbuster Inc (BBI.N: Quote, Profile, Research) and Netflix Inc (NFLX.O: Quote, Profile, Research).
It has only been in recent months that Hollywood's major studios have been allowing users to buy movies and store them permanently on computer hard drives. Until then, the studios were worried about piracy and would only let users "rent" films that could be stored for a short time on computers then automatically deleted.
"The financing validates that we are a serious player, an aggressive player and a leading player in the space," Marvis said.
He added that the ability to buy the films and permanently store them has boosted user traffic and revenues at the site, but he did not disclose specific numbers.
