VOD Service MovieBeam Shuts Down

MovieBeam, a pioneer in video-on-demand, has closed shop as a result of the bankruptcy of its parent company Movie Gallery Inc.

The corporation, which operates Movie Gallery and Hollywood Video stores, declared Chapter 11 in October (pdf). On December 15, the company closed MovieBeam, which it acquired from the Walt Disney Co. last year. Disney had toyed with the VOD service since 2003.

Philip Swan of TVPredictions.com blames MovieBeam's demise on Americans' "set-top fatigue." He says:

MovieBeam's failure should be a lesson for any company trying to sell a TV-based set-top at retail. Americans have set-top fatigue -- and they are tired of stacking set-top upon set-top next to their televisions. …

For a new set-top to succeed, it has to offer a service so powerful that Americans will ignore their set-top fatigue and give it a try. MovieBeam clearly was not that service.

MovieBeam's box retailed for $200, or $150 for a perpetually "limited time." Movies could be watched (via over-the-air transmission) for $2 to $5 each.

The Associated Press reports that subscribers who joined the MovieBeam service in March or later would be refunded the cost of the set-top box, which came loaded with 100 films.

The AP says MovieBeam had 1,800 subscribers when it shut down.

MovieBeam's exit from the business does not portend doom for video on demand. A flood of new Internet-based services are hitting the market, and they are providing more content than ever before.

ABI Research estimates that some 1.2 million Internet-based VOD devices will ship in 2008.

"Since this category first emerged in 2004-2005 with the debut of Akimbo's public Internet VOD product, vendors of these products have struggled with a number of hurdles that have so far made this market relatively unsuccessful," says ABI research director Michael Wolf. "The high cost of these devices, their reliance on the home network, the need for consumer self-installation, and the scarcity of content have all contributed to their lack of commercial success."

Wolf adds, "However, we believe that there is a possibility of a break-out success among these new entrants if they can create compelling content offerings, make consumer installation and management incredibly easy, and offer both the hardware and content at compelling pricing. We believe one way to achieve this is by incorporating some premium content using advertising support."

MovieBeam FAQ

What is MovieBeam?
MovieBeam is a new way to rent & watch movies at home. It gives you instant access to an ever-changing lineup of New Releases and Popular Pictures from virtually every major Hollywood studio.
Movies are beamed wirelessly into your home and stored on the MovieBeam Player so you can watch them instantly, whenever you want.

Around 80 movies are always available on the player, with up to 40 new movies beamed directly to it each month.

Plus, MovieBeam offers a selection of always-available High-Definition movies, so you can realize the full potential of your home theater!

How does MovieBeam work?
The MovieBeam Player comes with a small indoor antenna and a remote control. The player also comes pre-loaded with dozens and dozens of movies, with up to 40 movies updated each month using MovieBeam's digital signal. Customers automatically receive the new movies via the small indoor antenna that accompanies the MovieBeam Player. Movies are then stored digitally on the player.

The MovieBeam Player does not require any professional installation. The simple set-up process only requires connecting the player to a television, the small indoor antenna, and a phone line (for billing purposes only). Plug in the player, call to activate, and movies are immediately available.

After purchasing the player and activating the service, MovieBeam customers pay only for the movies they watch. There are no equipment rental fees, monthly subscription fees or annual contracts.

How often do new releases get added to MovieBeam?
New Releases are beamed into your home as soon as we get them from our Hollywood studio partners.

Popular Pictures are choice selections from the libraries of every major Hollywood studio – from more recent hits to timeless classics. You can always check which movies are coming in the Coming Soon section on the MovieBeam web site.

What kind of movies are on MovieBeam?
MovieBeam offers a wide variety of movies for every mood. Hollywood Hits, award-winners, indie favorites, and foreign films are all offered. MovieBeam will always have a comprehensive selection of genres, too, from comedies and children's movies to dramas and action films. See the movies that are currently available and coming soon on MovieBeam.

Do I need cable, satellite, or broadband service to get MovieBeam?
Movies are wirelessly transmitted via a digital signal - you don't need cable, satellite, or broadband to receive the signal, only the small indoor antenna that comes with your MovieBeam Player. All you need to have is a TV and a land-based phone line for MovieBeam to work.

How much does MovieBeam cost?
With MovieBeam, there are no installation costs or subscription fees. After purchasing the MovieBeam Player, you only pay for the movies you watch. To learn more about MovieBeam pricing and any special offers, please see our Pricing Info page.

How many times can I watch a movie after I rent it?
As many times as you'd like within a 24-hour period. So if the kids want to watch a movie over and over again, as they're prone to do, no problem. You can Pause a movie and come back to it whenever you want during that period, too.

How is MovieBeam different from other electronic video rental offerings?
Pay-Per-View - Unlike pay-per-view offerings, MovieBeam does not require customers to pay a monthly equipment-rental fee, subscribe to other offerings, or watch on a designated schedule without being able to Pause, FF, RW and stop. In most cases MovieBeam picture quality will be superior to your regular picture quality. MovieBeam offers a number of movies in HD.

Cable Video-On-Demand (VOD) - Unlike cable video-on-demand offerings, MovieBeam does not require customers to pay a regular monthly equipment-rental fee or subscribe to other offerings.

Internet Video-On-Demand (IVOD) - Unlike Internet video-on-demand services, MovieBeam does not require customers to have a high-speed Internet connection or wait for long periods of time while movies download to their computers. MovieBeam picture quality is far superior.

Is MovieBeam available in my area?
While MovieBeam is available throughout the country, some cities, and even some specific addresses may not be covered. To see if MovieBeam is available in your home, use our simple Availability Check.

Must I have an HDTV to use MovieBeam?
No. MovieBeam will work with virtually any television, whether HDTV or not. If you do own an HDTV with an HDMI connection, however, you will be able to enjoy special features and content available exclusively in high definition.

Will all movies be in High Definition (HD)? Why not?
Only a select set of movies on MovieBeam are available in HD. Today, not all movies are made by the movie studios in HD, and library movies were almost all made in standard definition format (or were shot on film and were only digitized in standard definition format for DVD's). MovieBeam arranges to get the best and most desired movies available in HD format. Not even DVDs deliver HD movies!

Does MovieBeam have any content other than movies?
In addition to full-length trailers and synopses of movies, MovieBeam is proud to offer extras for many movies, such as deleted scenes, outtakes, and other bonus material.