Disney Begins Beaming Films Home

The Walt Disney Co. launched its unique on-demand movie service MovieBeam on Monday, giving consumers another alternative to video-on-demand, pay-per-view, Internet downloads and traditional rental services.

MovieBeam uses the over-the-air broadcast spectrum of Disney's ABC stations and PBS' National Datacast network to deliver the movies to a set-top box with an antenna. Ten new movies arrive each week, and customers always have 100 films for instant viewing.

Unlike emerging download services that provide one movie at a time, MovieBeam's proprietary datacasting delivers the titles without the viewer's assistance and stores them on the set-top box's hard drive.

"We have a very compelling offer that gives consumers significantly added convenience to what their current experience is," said Salil Mehta, executive vp corporate business development at Disney.

MovieBeam hopes to appeal to consumers who are tired of paying late fees on video rentals. Parental controls also can limit how much is spent on weekly rentals and block movies based on MPAA ratings.

Titles from all major studios except Paramount are available, including "The Lord of the Rings: The Two Towers," "Harry Potter and the Chamber of Secrets," "Chicago" and "Catch Me If You Can." For now, the weekly updates will be the same for all users.

Negotiations are ongoing with Paramount to add its titles, Mehta said.

MovieBeam will launch this week in three test markets — Jacksonville, Fla., Salt Lake City and Spokane, Wash.

Through participating retail partners, customers arrange to receive the free set-top box through the mail. It arrives with 100 movies stored on the drive and does not require additional equipment other than a telephone line for billing purposes.

While the set-top box is free, the service costs $6.99 per month with a 12-month commitment, and movies cost $3.99 for new releases and $2.49 for others. Unlimited viewing is allowed for 24 hours.

A $30 one-time activation fee also may be required. Free full-length previews are available, as are standard VCR transport controls such as rewind and pause.

Because MovieBeam will freely broadcast digital movies across a city, it relies on copy protection to scramble the signal. Additional security is engineered into the box to prevent tampering or the recording of movies off the receiver to a VCR or DVD recorder.

MovieBeam's development costs were not disclosed, but Mehta said it costs about $250,000 to equip a station to broadcast the datacast.

Disney may eventually provide content other than films over MovieBeam.

After a slow start, Disney has been rapidly pursuing various means of delivering movies digitally.

Disney's Buena Vista Pay Television recently agreed to make Disney films available for download via CinemaNow (HR 9/15).

In July, Disney became the last major studio to embrace download-on-demand movies by signing a distribution deal with Movielink.

At the time, Disney officials also said they were still committed to using their Movies.com Web site as an online destination for movie downloading (HR 7/24).