Recenty Variety reported that over two years and $56 million worth of losses after it launched, Disney and a new group of private investors are restarting the MovieBeam over-the-air video-on-demand service in 29 cities.
MovieBeam piggybacks data onto PBS broadcast signals and sends movie files to set-top boxes. Users can then rent any of approximately 100 new and library releases on the box for the same price they would pay at a video rental store.
The selection is updated weekly so new releases are always available.
Backed by fresh investments totaling $48.5 million, reformed MovieBeam has deals with every major studio except Sony, which is likely holding back content for its own video-on-demand service Connect, set to add movies in March.
Most films will be available in the video-on-demand window, which typically comes 30 days after homevideo. But in a deal that's the first of its kind, MovieBeam will have films from Disney the same day they hit homevideo, with an option to watch in high-definition. Warner Bros. pics also will be in hi-def, though in the VOD window.
Disney launched MovieBeam in October 2003 in three test cities: Jacksonville, Fla.; Salt Lake City; and Spokane, Wash. Execs kept promising service would expand to other cities, though it never did.
MovieBeam was championed at the Mouse House by former head of strategic planning Peter Murphy. Soon after he left, Disney suspended the service in April. By last summer, Disney admitted in an SEC filing it had taken two separate writedowns for MovieBeam totaling $56 million.
At the time, Disney said it was looking to take on strategic investors, a process it has concluded now that MovieBeam is relaunching as an independent company. New backers include Cisco, Intel and several venture capital funds.
Disney kicked in additional funds as part of the new financing. That coin, along with Mouse House's previous spending, makes it the largest equity shareholder in MovieBeam, though it does not have majority control.
As it launches today in most major cities, MovieBeam will face stiff competition not only from videostores and Netflix but cable and Internet video-on-demand. Execs are betting that the ease of use will overcome its two main drawbacks: the $200 hardware cost and the limited selection of films.
"This is about delivering the back wall of the video store right to your television with one click," boasted CEO Tres Izzard.
Later this year, MovieBeam hopes to add an Internet connection that will let users access a wider selection of films. As with Web VOD services like Movielink, though, users will have to wait for films to download before they can watch.