News Analysis
Can MovieBeam Ride HDTV to Success?
The Disney-backed company launches a new Video on Demand set-top.
By Phillip Swann

Washington, D.C. (February 14, 2006) -- Hold on, Sony and Toshiba. There's a new kid in town.

MovieBeam, which is backed by Disney, Cisco and Intel,  says it will begin selling a new set-top this week that can deliver on-demand High-Definition TV movies to the home. The early launch will give the VOD service a leg up on Sony and Toshiba whose HDTV DVD players will not be released until late spring.

 The MovieBeam receiver, which will cost around $200, should be available in large retail stores later this week. MovieBeam says the set-top will come equipped with 100 movies, some of which will be first-run high-def titles from Disney and Warner Bros. studios.

The cost of the HDTV movies will be $4.99 each while standard definition films will be either $3.99 or $1.99. MovieBeam viewers will only have to pay for the movies they order. The on-demand service will use a datacasting technology to deliver 10 new movies to the set-top every week.


MovieBeam launches this week in 29 cities.

In addition to Sony and Toshiba, MovieBeam faces a number of challenges:

1. The company's prime target is the frequent movie watcher. However, that person likely already has a cable/satellite receiver, a DVD player, a DVR and maybe an A/V receiver and thus may hesitate to buy yet another set-top.

2. Despite the backing of six of the seven major studios, many film buffs may find MovieBeam's lineup of 100 titles too limiting.

3. The HDTV audience may find the number of high-def films too small to justify the purchase. According to MovieBeam, the early lineup of HD movies will only include titles from Disney and Warner Bros.

4. The datacasting technology has some benefits because it does not require a Broadband Internet connection. However, the service has yet to be tested on a national scale. (MovieBeam has conducted trials in selected cities.) MovieBeam's set-top will receive the datacasting signals via a book-size indoor antenna

However, despite the obstacles, MovieBeam must be taken seriously considering the relatively low price of the set-top and the movies themselves. Plus, programming-starved HDTV owners may get the set-top out of desperation.

And with Disney, Cisco and Intel behind it, MovieBeam shouldn't lack for funds for promotion and distribution.

© TVPredictions.com

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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