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Disney launches 'MovieBeam' in three markets

Sun, 09/28/2003 - 8:00pm
Jeff Baumgartner

The Mouse is taking direct aim at movie-lovers. The Walt Disney Company has launched MovieBeam, a movie rental service that uses datacasting and a separate set-top box to deliver content to subscribers.

Disney launched the service initially in three markets: Jacksonville, Fla.; Salt Lake City, Utah; and Spokane Wash.

The MovieBeam set-top from Samsung Electronics will automatically receive and store "DVD-quality" movies on its hard drive. MovieBeam will datacast the movies securely to subscribers, who must install a small indoor antenna in order to receive the signals. Moviebeam said it will rotate in about 10 new movies per week, and offer at least 100 different movies at any one time.

MovieBeam will not require consumers to purchase the device, but the service will carry a monthly equipment fee of $6.99, plus a one-time $29.99 activation fee in "certain areas." MovieBeam customers must also pay $3.99 for 24-hour access to new releases and $2.49 for other titles.

Unlike Movielink, which relies on high-speed cable or DSL connections to deliver titles, MovieBeam will beam its content via the broadcast spectrum of TV stations owned by ABC and National Datacast's network of PBS stations. The service requires a separate phone connection for billing.

MovieBeam said it has already inked distribution agreements with a variety of studios, including DreamWorks SKG, MGM Studios, Miramax Films, New Line Cinema, Sony Pictures, Universal Studios, Warner Bros., 20th Century Fox Studios and Walt Disney Studios.

The service, which will abide by traditional VOD availability windows, comes to launch with 105 featured titles. Initial new releases include The Lord of the Rings: The Two Towers, Harry Potter and The Chamber of Secrets, Chicago, Daredevil and About Schmidt.

MovieBeam also hopes to win customers with a strong retail presence. The company already has relationships in place with Best Buy, Circuit City, Sears, Huppin's Hi-Fi, Magnolia Audio Video, RC Willey, Sound Advice and Ultimate Electronics.

MovieBeam will side-step cable and DBS providers — the traditional VOD and pay-per-view gatekeepers. But the service will provide a new revenue stream for broadcasters that lease to MovieBeam their unused spectrum, said GartnerG2, in a research note.

GartnerG2 added that the box "won't fit neatly with other items in the home entertainment center," noting that additional space will be required to "accommodate its unusual shape and broadcast antenna."

Because MovieBeam requires another box and adds another model to the consumer entertainment mix, the research firm doesn't expect the service to take over the world anytime soon.

"While MovieBeam is not likely to be an instant success, it offers yet another media channel in the competition for consumer time and wallet share," GartnerG2 wrote, adding that the service will expand to more areas next year at a cost of roughly $250,000 per market.

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