RESEARCH TRIANGLE PARK — An interesting new player cracks the home video market today with the launch of MovieBeam www.moviebeam.com in 29 metropolitan markets across the U.S.
MovieBeam, which has drawn investment from Cisco Systems and is a creation of the Walt Disney Company, is offering movie lovers a set-top box with a capacity of 100 movies that can be viewed on demand over a 24-hour period for fees ranging from $1.99 to $4.99.
The startup is targeting a $10 billion market for video rentals in which 30 million households rent four or more movies a month. Of those rentals, 80 percent are new releases, according to MovieBeam.
Atlanta is among the first markets to be served. No North Carolina cities are on the original launch list.
The hardware, which can be purchased at various retailers such as Best Buy and Sears or online, cost $200 after a rebate. There also is a $30 activation fee.
The “secret sauce” for MovieBeam is its use of over-the-air datacasting technology that will deliver as many as 10 new movies a week to the receivers, which have built-in antenna.
High-definition movies will also be made available as part of the service.
Other markets outside of Atlanta are: Baltimore, Boston, Buffalo, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Jacksonville, Las Vegas, Los Angeles, Memphis, Minneapolis, Nashville, New York City, Orlando, Philadelphia, Phoenix, Portland (Oregon), Salt Lake City, San Antonio, San Diego, San Francisco, Seattle, St. Louis, Tampa and Washington, D.C.
The crucial requirement to utilize the service is to be within range of the datacast service. A web site (www.moviebeam.com/opencms/opencms/Pages/GetMovieBeam ) checks availability by street address.
MovieBeam faces considerable competition, from neighborhood video rental stores to mail delivery services and video-on-demand rentals from cable firms. One analyst also told The New York Times that he questioned how many consumers will want to pay so much money up front before getting access to any movies.
“The pricing model seems to be somewhat questionable here,” Michael Gartenberg of Jupiter Research told The Times. “People will ask why they need to spend that much money for a box.”
On the other hand, another analyst quoted in a news release from MovieBeam was more positive.
“MovieBeam, with its easy-to-use service, breakthrough content rights, and low-cost delivery platform, is serving a previously unmet need in the marketplace — providing consumers with a more convenient, higher-quality movie-rental experience through an unmatched combination of content, technology and relationships,” said Gerry Kaufhold, principal analyst at In-Stat. “As a stand-alone company, with a strong investor syndicate, MovieBeam is well-positioned to become an important player in the digital entertainment business by delivering on the promise of on-demand movies.”
Walt Disney has “incubated” MovieBeam since 1996. On Monday, the company announced $48.5 million in Series A financing that drew Cisco and Intel Capital as well as Disney as investors. Also participating in the round were Mayfield Fund, Norwest Venture Partners and VantagePoint Venture Partners.
The investment by Cisco is another step in its embrace of consumer markets and its evolution beyond its core routing and networking technology. Through its purchase of home and small-business networking firm Linksys to its pending acquisition of Scientific-Atlanta, which is such a big player in the cable TV market, Cisco is positioning itself as a player in digital entertainment and information regardless of the delivery vehicle.
Google Losing Luster?
An article in the new issue of Barron’s, titled “In the Drink”, raises questions about the long-term price of Google stock.
Noting that Google shares have “tumbled” 25 percent from a high of $475, writer Jacqueline Doherty sees more trouble ahead.
“The share price could well be cut in half over the next year as the Internet giant grapples with growing competition from Microsoft and Yahoo!, increased pricing pressures in its online ad sales and mounting concern about what’s known as click fraud,” she wrote.
Shares of Google fell $16.91 on Monday following the Baron’s article to close at $345.70.
BellSouth To Post Amber Alerts
BellSouth, which already notifies its thousands of field technicians about Amber Alerts, is also adding the information about abducted children to its web site.
“This is an important expansion of a public-private alliance that benefits the people we serve across the Southeast,” said Rod Odom, president of BellSouth Network Services. “We started by using our technology to bring the alerts to our technicians and have added capabilities so that we’re now able to bring the alerts to the web at any time of the day or night.”
Amber (America’s Missing: Broadcast Emergency Response) was launched in 1997 following the kidnapping and murder of 9-year-old Amber Hagerman in the Dallas-Fort Worth metropolitan area.