Disney rolls out 'MovieBeam'
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. The box's 160 Gigabyte hard drive will ship with 100 pre-loaded movie titles.
"MovieBeam offers a more convenient way to get movies compared to the video store," said Tres Izzard, senior VP and general manager of Buena Vista Datacasting, which operates the MovieBeam service. He estimated that most consumers can install and configure the service in about five minutes.
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 technology and the existing partnerships with ABC and PBS will enable MovieBeam "to cover the vast majority of the country," Izzard said, noting an anticipated national rollout in 2004. For each new site, MovieBeam must make a "modest" $200,000 to $250,000 investment in a local tower.
MovieBeam has 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 will abide by traditional VOD availability windows.
But customers who sign up at retail won't have immediate access to MovieBeam content. After the customer purchases the service, MovieBeam then sends the receiver via two-day Federal Express. Customers can also sign up directly through the MovieBeam Web site or via a special toll-free number.
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.
IRG Research, meanwhile, sees MovieBeam as yet another catalyst for cable's VOD efforts, predicting that domestic MSO VOD penetration could be as much as 95 percent of digital homes passed by 2007.
But IRG doesn't see MovieBeam turning into an overnight success story, outlining that the service has some limitations tied to its distribution model.
Cable VOD "gives consumers more choice in an interactive format," IRG wrote. "MovieBeam is a non-interactive service limited by the size of the hard drive in the box."