MovieBeam offers first HDTV DVR movie rentals

[dkennedy]

MovieBeam offers first HDTV DVR online movie rentals

February 14, 2006

By Robert MacMillan/Gina Keating, Washington Post

A video on demand movie service spun out of Walt Disney Co. is introducing on Tuesday the first U.S. home delivery service for high-definition films, backed by top Hollywood and Silicon Valley partners.

MovieBeam, of Burbank, California, said it plans to begin offering first-run films this week from six of the seven film studios in standard digital video format and high-definition films from Disney and Warner Bros. studios.

The video-on-demand service is aimed at heavy movie renters and initially will be offered in 29 U.S. cities, including New York, Chicago and Los Angeles, at prices competitive to renting the same movie at video retailer Blockbuster Inc..

"They appear to be ready to deliver true high-definition movies. That's a breakthrough," said Gerry Kaufhold analyst In-Stat/MDR.

MovieBeam, which was founded by Walt Disney four years ago, appeared to have run out of steam when Disney took a $24 million write-down on company last summer. It was revived last month with a $48.5 million cash infusion from Disney, Cisco, Intel Corp. and three venture capital firms.

MovieBeam bypasses network bottlnecks through a technology called datacasting, which broadcasts up to ten new movies a week to subscribers using an exclusive transmission deal to send data signals over the Public Broadcasting System network.

Delivering high-definition (HD) videos to consumers has been restricted by the limits of high-capacity networks needed to deliver feature-length videos to millions of consumers via satellite, phone or cable TV networks.

It also gets the jump on the emerging high-definition video disk market, which has been hampered by standards battles.

Cisco Systems Inc. will sell the MovieBeam film storage boxes, which has capacity for up to 100 movies, under its Linksys consumer electronics brand through U.S. electronics retailers Best Buy Co. CompUSA and Sears.

The Linksys box, with capacity for 100 movies, is priced around $200, after a rebate, and a $29 activation fee. It's meant to be stacked on top of a cable TV set-top box and comes with a paperback-book sized antenna to receive movie updates.

First run standard format videos rent for $3.99 and high-definition videos rent for $4.99. Older movies in the catalog cost $1.99 for standard format and $2.99 to rent high-definition format movies.

"If you're somebody who rents an awful lot of movies, this is potentially attractive," Forrester Research analyst Josh Bernoff said.

"But, for the great mass of the movie-viewing public, getting a separate set-top box just to get movies is an awfully big stretch," he said.

JUMPSTARTING U.S. ONLINE MOVIE DELIVERY

Despite frequent obituaries for the video store industry, seven out of ten movies are still rented at retail outlets. An estimated 85 percent of rentals are for first-run videos -- the 50 or 60 latest releases prominently featured in stores.

It's this piece of the video market MovieBeam targets.

MovieBeam offers consumers the ability to rent separate movies. By contrast, Netflix Inc. offers DVD rentals for a monthly subscription fee from a library of 30,000 films.

Late last year, Netflix Chief Executive Reed Hastings said the online DVD rental company had postponed the launch of its own movie download service, which was to have debuted in 2005 because of problems acquiring content.

Hastings said in October that Netflix was working to develop technology to deliver online movies so the service can be ready to launch "when the content climate begins to thaw."

Media companies had resisted allowing widespread online downloading of first-run movies for fear of cannibalizing the huge profits they make on DVD sales and of losing DVD sales to piracy.

Wedbush Morgan analyst Michael Pachter said on Monday that there is also a question of whether U.S. broadband penetration is sufficient to make online downloading a significant revenue generator for the studios.

"You can't rent high-definition films today," said investor Matthew Howard of Norwest Venture Partners, a co-investor with Mayfield Fund and VantagePoint Venture Partners. "The beauty is that everyone else has to work out network access in order to offer anything similar," he said of potential online rivals.

[hurnik]

I wonder what they consider "hi-def" movies? 720p?

$5 seems a bit pricey, IMO, when I can rent the DVD for $2 or less via NetFlix.

Of course, that depends on what they mean by hi-def. If it's 720p with DTS and/or DD (ie, it's like the DVD but hi-def), then possibly it may be worth the extra.

But I can't remember how much TW's HD PPV is either, and whether they do just DD or DTS as well (I personally prefer DTS over DD, but even on DVD, the majority seems to be DD)

[dkennedy]

Disney Launches MovieBeam

February 14, 2006

By Steve Donohue, Multichannel News

Cable operators, direct-broadcast satellite providers and video-rental stores in 29 states have a new competitor in The Walt Disney Co.’s MovieBeam, which launched Tuesday in 29 major markets, including New York, Los Angeles and Chicago.

Using PBS transmitters to deliver movies to $199 HD set-tops, MovieBeam will offer films on the same day they’re released on DVD -- something cable operators have attempted to persuade studios for years to allow them to do.

Disney mothballed MovieBeam in April, but it recently spun off the company and recruited investors Cisco Systems Inc. and Intel Corp.

Best Buy Co. Inc., CompUSA and Sears, Roebuck & Co. are selling the MovieBeam box, which comes with 100 movies on the hard drive but will offer just 10 new titles each week. New releases cost $3.99, while library titles go for $1.99.

The move should make Disney’s talks for new cable-carriage deals with Comcast Corp. and Time Warner Cable interesting. Disney president Bob Iger told analysts Feb. 6 that the talks were yielding debate on “the role of the distributor versus the role of the programmer.”

MovieBeam is also reportedly looking at using the Internet to download movies.

[dkennedy]

On the beam for film fans

March 6, 2006

By Phyllis Furman, New York Daily News

Magazine ad heralds MovieBeam as alternative to video stores.

New York's about to get bombarded by movie ads. But not for "Brokeback Mountain," "Crash" or "Capote."

Starting this week, MovieBeam, a just launched video-on-demand service, will beam print, radio and Internet ads in the city and across the country - declaring itself the convenient alternative to the "hassles" of video stores, MovieBeam execs told the Daily News.

Partly owned by media giant Disney, MovieBeam is the latest show biz gadget looking to rake in big bucks by hooking movie fans.

Customers who sign up get a choice of 100 movies, some as soon as they are available as DVDs, delivered to a MovieBeam box in their homes.

Set-up costs $199.99 for the box, plus a $29.99 activation fee. After that, recently released flicks cost $3.99, plus $1 more for a selection of movies available in high definition. There is no subscription fee and satellite, cable or Internet service is not required.

The service launched quietly in 29 markets across the country, including New York, about a month ago. But now, with displays up at stores like Best Buy, Sears and CompUSA, MovieBeam is turning up the volume on its sales pitch.

In one radio spot starting this week, a man comes home beat from work. He tells his wife he wants to go to the video store. She takes him to the living room.

"I got us MovieBeam," she says. "We'll have all the new releases from virtually every Hollywood studio to choose from instantly - without any video store hassles."

"Most people have a video rental horror story. You go into a video store and look for 'Flight Plan,' and it's not there," MovieBeam sales and marketing chief Craig Crabill told The News. "Why should you wait for a movie? Why shouldn't your movie wait for you?"

A MovieBeam magazine ad shows a picture of the MovieBeam video-on-demand screen and ticks off its key features: "No Subscriptions, No Monthly Fees, Pay Only For What You Watch."

The ad blitz comes amid high skepticism over MovieBeam's ability to stand up against the still powerful video chains, mail order juggernaut Netflix and cable companies.

Experts say MovieBeam will have an especially tough time convincing movie fans to fork over $200 bucks to install another box in their living room when their cable company already offers a comparable video-on-demand service.

Execs at Time Warner Cable New York note that more than 70% of their customers have already upgraded to digital cable. That gives them access to 400 video-on-demand titles, including must-have entertainment like HBO on-demand.

"This is another provider and another bill," said Time Warner Cable New York spokeswoman Harriet Novett. "We give you one bill for everything."

MovieBeam execs claim they don't need to win over everyone to be successful. Their target audience are the 30 million Americans who rent four flicks or more a month.

They hope to stand out by offering some titles in high definition. And MovieBeam will get some movies faster than its rivals.

Disney has agreed to release its movies on the box as soon as they are available on DVD. That means MovieBeam customers will have access to "The Chronicles of Narnia" on April 4, the same day the disc hits stores. It could take at least another month after that for cable companies to offer that title.

The MovieBeam service was originally developed by Disney on its own and was tested in three markets in 2004.

The technology sends the movies over TV signals that are received by a proprietary antenna, which then writes them onto the box's hard drive and are then available for playback.

But the show biz giant had trouble getting movies from rival studios. It was forced to take a write-off on the venture.

More recently Disney brought in partners, including Cisco Systems and Intel, raising $48.5 million. They've been able to secure titles from all of the studios, with the exception of Sony.

"At some point we will be selling movies," Crabill said. "This is the next evolution of movie retailing."