Disney Dumps MovieBeam VOD Pilot

The LA Times reported today that Walt Disney Co. is shutting down its MovieBeam service trial that launched in September 2003 in three markets -- Jacksonville, Fla., Salt Lake City and Spokane, Wash. While Disney's concept of leapfrogging cable operators to deliver video-on-demand (VOD) services through a trickle-stream data path to a DVR-like set-top box has merit, the implementation of MovieBeam was moronic. MovieBeam offers subscribers a choice of 100 films (with 10 new movies per week) from major Hollywood studios. The content is transmitted via over-the-air signals of local ABC and PBS stations to a digital set-top in the home with a 160-gigabyte hard drive. Subscribers pay $8.99 a month to rent the box and then $1.99-$3.99 for each movie. With Blockbuster and NetFlix offering unlimited DVD rentals for under $20 a month, the MovieBeam pricing model was unrealistic. And, the requirement that consumers install yet another box in their entertainment center is too high a hurdle. The obvious approach is to simply feed a box that is already there, whether it's a Tivo or satellite DVR set-top, through a broadband IP connection. Tivo announced just such a deal with NetFlix seven months ago, but there's no consumer service offering yet. In January the 2Wire-SBC-Yahoo!-Dish team announced plans to offer an integrated satellite DVR set-top and broadband DSL home networking gateway to support VOD. And EchoStar is readying its own DVR-VOD solution called Dish on Demand. Like MovieBeam Dish will download up to 100 movies (albeit via satellite) and store them on the set-top for subscribers, making the films accessible on an on-demand basis. With no extra box or rental fees required, and the interface integrated into a consumer's existing TV service, the DISH offering could be a winner. MovieBeam may be dead, but the threat to cable from alternate VOD providers is alive and kicking.

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