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Disney Bringing Back MovieBeam Set-Top Box
[February 13, 2006]

Disney Bringing Back MovieBeam Set-Top Box

(AP) Disney Bringing Back MovieBeam Set-Top Box
By GARY GENTILE
AP Business Writer
LOS ANGELES
The Walt Disney Co.'s MovieBeam set-top box is coming back in an upgraded version that clearly aims to be a Blockbuster in a box.

The box receives movies through over-the-air broadcasts and stores them on a hard drive. Disney started testing the service in three cities in 2003, then put it on hiatus in April.

This time, Disney is relaunching the box as a separate company, MovieBeam Inc., with several new new financial backers, including Cisco Systems Inc. and Intel Corp., and is expanding the service with plans to eventually make it available on laptop computers and other devices.

The new set-top box can show movies in high definition and display DVD extras such as directors' commentaries.

Unlike cable TV video-on-demand services that keep movie files on a central computer and send them to an individual consumer when ordered, MovieBeam boxes come preloaded with 100 films.


About 10 new movies are sent each week over an unused part of the broadcast TV signal using a technology called datacasting.

Consumers will pay $199 for the box after a rebate, and a $29 activation fee. After that, they pay video store prices for the movies they watch. A rental is good for a 24-hour period.

"We're targeting people who rent a lot of movies and who have horror stories about going to the video store," said Tres Izzard, MovieBeam Inc.'s chief executive officer.

The service will launch in 29 large markets with plans to take it nationwide by the end of next year.

MovieBeam plans to introduce a standalone antenna with a USB port that can be attached to a computer or other portable device, eliminating the need for a box.

But the real goal is to get ready for the ultimate video store end-run -- allowing consumers to buy films and burn them to a DVD.

"Those rights don't exist today, but they will be coming and we want to be a part of that," Izzard said.

The set-top box will be made by Cisco's Linksys division. Cisco has embarked on an ambitious plan to expand Linksys' technology into all types of home audio and video gear, hoping to connect the home the way it has connected the corporate world.

Intel is also making a big push into home entertainment with its "Viiv" PC platform, a branding campaign for its newest chips.

"As the lines between computing and consumer electronics devices continue to blur, it is imperative that high quality premium content be readily available and accessible," Intel CEO Paul Otellini said in a statement.

Disney remains MovieBeam's largest investor. The service has been championed by Robert Iger, who took over as Disney CEO last October and has been a strong proponent of embracing new businesses made possible by technology. Disney was the first studio to allow its TV shows to be downloaded from Apple Computer Inc.'s iTunes service.

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