December 19, 2007
Where’s the demand for movies-on-demand?
The lights have gone out for MovieBeam, a set-top box service that failed to grab a significant slice of the movies-on-demand market.
The service closed at the weekend after its parent company Movie Gallery went into Chapter 11 bankruptcy in October.
MovieBeam was launched by Walt Disney in 2003, closed down in 2005 and then relaunched as a spin-off in February 2006 in which Disney, Intel, Cisco and three VC firms invested $48.5m.
Movie Gallery picked it up in March this year for just $10m.
MovieBeam’s $199 set-top box used part of the broadcast spectrum to download up to 100 new movies to its hard drive that could then be rented and watched on the user’s TV.
Its problem was too much competition appearing and too little consumer buy-in to the concept.
MovieBeam competed with video on demand offered by cable companies. Then there were other digital download services such as MovieLink and CinemaNow. These allowed downloads to PCs or laptops, which could be hooked up to a TV.
A whole range of networking devices have also been appearing such as Apple TV and D-Link’s Medialounge player with MediaMall TV channels, which allow content to be readily moved from the PC or internet to the TV screen.
A second wave of services also arrived in the past year – Amazon Unbox on Tivo, Netflix’s free online movie viewing service and Xbox Live’s impressive collection of high-definition material for the TV-connected 360 console.
Akimbo, a similar set-top box service to MovieBeam, has also failed to gain traction. In September, a Silicon Valley start-up launched the $399 Vudu box, which can stream its database of 5,000 movies to a TV over a broadband connection and charge $1 to $4 rental for each movie.
Whether any standalone set-top box service can succeed is questionable, given it has to fight for a place with games consoles and cable and satellite boxes under the TV that can have the same capability.
The television itself is moving towards becoming a device with its own direct connection to the internet, where consumers may prefer to pay for a web-based service, rather than connect up yet another piece of hardware.
