MovieBeam offers first HDTV online movie rentals

[oz]

I thought this was interesting.


MovieBeam offers first HDTV online movie rentals

By Robert MacMillan and Gina Keating

NEW YORK/LOS ANGELES (Reuters) - A video on demand movie service spun out of Walt Disney Co. is introducing on Tuesday the first U.S. home delivery service for high-definition films, backed by top Hollywood and Silicon Valley partners.

MovieBeam, of Burbank, California, said it plans to begin offering first-run films this week from six of the seven film studios in standard digital video format and high-definition films from Disney and Warner Bros. studios.

The video-on-demand service is aimed at heavy movie renters and initially will be offered in 29 U.S. cities, including New York, Chicago and Los Angeles, at prices competitive to renting the same movie at video retailer Blockbuster Inc.

"They appear to be ready to deliver true high-definition movies. That's a breakthrough," said Gerry Kaufhold analyst In-Stat/MDR.

MovieBeam, which was founded by Walt Disney four years ago, appeared to have run out of steam when Disney took a $24 million write-down on company last summer. It was revived last month with a $48.5 million cash infusion from Disney, Cisco, Intel Corp. and three venture capital firms.

MovieBeam bypasses network bottlnecks through a technology called datacasting, which broadcasts up to ten new movies a week to subscribers using an exclusive transmission deal to send data signals over the Public Broadcasting System network.

Delivering high-definition (HD) videos to consumers has been restricted by the limits of high-capacity networks needed to deliver feature-length videos to millions of consumers via satellite, phone or cable TV networks.

It also gets the jump on the emerging high-definition video disk market, which has been hampered by standards battles.

Cisco Systems Inc. will sell the MovieBeam film storage boxes, which has capacity for up to 100 movies, under its Linksys consumer electronics brand through U.S. electronics retailers Best Buy Co., CompUSA, and Sears.

The Linksys box, with capacity for 100 movies, is priced around $200, after a rebate, and a $29 activation fee. It's meant to be stacked on top of a cable TV set-top box and comes with a paperback-book sized antenna to receive movie updates.

First run standard format videos rent for $3.99 and high-definition videos rent for $4.99. Older movies in the catalog cost $1.99 for standard format and $2.99 to rent high-definition format movies.

"If you're somebody who rents an awful lot of movies, this is potentially attractive," Forrester Research analyst Josh Bernoff said.

"But, for the great mass of the movie-viewing public, getting a separate set-top box just to get movies is an awfully big stretch," he said.

JUMPSTARTING U.S. ONLINE MOVIE DELIVERY

Despite frequent obituaries for the video store industry, seven out of ten movies are still rented at retail outlets. An estimated 85 percent of rentals are for first-run videos -- the 50 or 60 latest releases prominently featured in stores.

It's this piece of the video market MovieBeam targets.

MovieBeam offers consumers the ability to rent separate movies. By contrast, Netflix Inc. offers DVD rentals for a monthly subscription fee from a library of 30,000 films.

Late last year, Netflix Chief Executive Reed Hastings said the online DVD rental company had postponed the launch of its own movie download service, which was to have debuted in 2005 because of problems acquiring content.

Hastings said in October that Netflix was working to develop technology to deliver online movies so the service can be ready to launch "when the content climate begins to thaw."

Media companies had resisted allowing widespread online downloading of first-run movies for fear of cannibalizing the huge profits they make on DVD sales and of losing DVD sales to piracy.

Wedbush Morgan analyst Michael Pachter said on Monday that there is also a question of whether U.S. broadband penetration is sufficient to make online downloading a significant revenue generator for the studios.

"You can't rent high-definition films today," said investor Matthew Howard of Norwest Venture Partners, a co-investor with Mayfield Fund and VantagePoint Venture Partners. "The beauty is that everyone else has to work out network access in order to offer anything similar," he said of potential online rivals.

(Additional reporting by Eric Auchard in San Francisco)

[StarvingForHDTV]

using an exclusive transmission deal to send data signals over the Public Broadcasting System network.

What exactly does this mean?

[Gregg Lengling]

What exactly does this mean?

Sounds like they will use some of the local PBS stations data stream to send the programming out.  Just a guess.....

[Joseph S]

Well then that sucks. Sure hope we don't get it. Why don't they use Pax instead?

[Gregg Lengling]

Well then that sucks. Sure hope we don't get it. Why don't they use Pax instead.

I'm sure that if the local PBS station is part of this then they will probably use bandwidth on Digital 8 (10-?).  It'll be interested to find out the data rate they will use for downloading these movies.  If they just use a 1mb stream out of the 19plus that is available on a digital channel, it shouldn't cause any problems if they load it on channel 10.

[kjnorman]

My understanding of datacasting (and I could easily be wrong here) is that it is not a continuous stream but a burst of data every now and then.

For example, they could burst the movies to the box, overnight when no one is watching once a week, so that the films are available on the hard disk the next day.  

I am presuming that the burst of data will be repeated incase the user did not get a full film download on the first try.

Any way, I would not buy a $200 box just to watch rented films.  Also I am sure that it will only output HDMI, and so will be off no use to me anyway (my HDTV only has component connections).

Also what quality is this?  Yes its hdtv, but at what bit rate?  Is it some form of proprietary Mpeg4 compression (my guess), is it original aspect ratio?  Will it be able to carry uncompressed Dolby Digital/DTS sound tracks?  Probably not...

It'll be interesting to see who will actually but into this.

[Mark Strube]

I would imagine they'd give it at least a 4-6mbps stream. 1mbps, even if it's mpeg4 compressed, would take quite awhile to get a movie.

[wxndave]

Moviebeam will use a signal that is injected into an analog transmitter.  The data rate is at least 1.5mpbs.  I have seen tests of this and from my opinion is just a bad idea.  What I can't understand is why a company that knows analog is going away would choose to not develop a digital solution.

Don't know what the status is hear but it will be interesting.  If you want to find more information, search for DOTCAST.

Dave

[picopir8]

Sounds like Divix reincarnated.

Who is going to pay $200 for a box, $30 for activation just for the ability to order pay per view movies?  Maybe 10 years ago but with on demand PPV, internet movie streaming services, netflix and the like, and video rental stores everywhere, I just dont see the market.  Sure they have HD but by the time this is available everywhere, cheaper forms of HD rental will also be just as prevalent. The only way I would jump is if it the box were free or if came with enough rentals to offset the price of the box.