Video rental choices expanded Tuesday in the Tampa Bay region, with a Disney-backed venture delivering movies on demand directly to a set-top box to challenge video stores, mail services and cable systems.
Aimed at heavy movie renters, MovieBeam will offer new titles from several major Hollywood studios on the day they are released on DVD, a first for an on-demand service. It's 30 to 60 days sooner than typical video-on-demand offerings from cable systems.
The movies will be transmitted directly to a set-top box, letting customers choose what and when they want to watch. And MovieBeam (www.moviebeam.com), which includes Intel and Cisco Systems as partners, will get another jump on competitors by having "true high-definition movies" available earlier.
"If you've got an HDTV, if you like to watch three or four movies a month, and you don't want to pay a monthly subscription service fee, the MovieBeam service makes sense," said Gerry Haufold, principal analyst for the In-Stat research firm. "It's not for everybody, but there's probably a solid market segment that will make them successful."
The home entertainment scene is undergoing a major shift as technology improves and as content providers such as movie studios and TV networks look for more ways to reach audiences.
Last month, the movie Bubble was released in theaters, on a high-definition cable TV channel and on DVD on the same day.
In addition to technology that allows distribution directly to consumers, content providers are looking for ways to tinker with the way they traditionally earn their money: theatrical release followed by DVD release followed by pay per view and video on demand.
Direct-to-the-consumer cuts out the middleman and, the industry hopes, won't affect how much it makes on each of those segments. What makes MovieBeam different, says Michael Greeson, president of the Diffusion Group research firm, is Disney and the deals it has struck with major studios.
"The advantage Disney has is that they have a powerful brand and they're going to be associated with top-notch content," Greeson said.
Disney has been testing MovieBeam for several years in three cities, including Jacksonville. It is touting convenience and availability - no empty box at the video store or waiting for the mail - as key selling points.
Here's how it works: Customers will have to buy a set-top box ($199 after rebate and $29.99 activation fee), which connects to a TV. The box has a 160-gigabyte hard drive that will store 100 movies at a time, the most popular recent releases.
Movies will be transmitted to the box via an over-the-air TV signal, with up to 10 new movies a week promised.
"MovieBeam is a plug-and-play service," said Carl Crabill, MovieBeam's vice president for sales and marketing. "It doesn't require a professional installer. No dishes. No holes drilled in walls."
The menu covers about 85 percent of the rental market selections, Crabill said.
Movie rentals will cost $3.99 for popular releases, $1.99 for "library" selections of older titles, which are comparable to video store fees, and $1 more for high-definition versions.
Viewers will be billed monthly, but there's no monthly subscription fee similar to those charged by mail/Internet services such as Netflix.
MovieBeam calls the price of the set-top box competitive with services such as Netflix because there's no monthly subscription fee. It notes that its boxes are less expensive than upcoming DVD players in competing HD DVD and Blu-Ray standards.
Unlike the DVD players, "we don't have to worry about what format we're playing on," Crabill said.
However, Greeson of the Diffusion Group says studies have shown that high upfront costs for such services can turn off consumers. If MovieBeam can overcome that resistance, he says, it can be a compelling service.
Tuesday's rollout was the first part of MovieBeam's expansion plans. Similar to other companies, it plans Internet delivery that will expand its selection by thousands, Crabill said. The service will require a high-speed Internet connection, such as cable or DSL.
Dave Gussow can be reached at email@example.com or (727) 445-4165.
MOVIEBEAM: HOW IT WORKS
+ Customers must buy a set-top box ($199 after rebate and $29.99 activation fee).
+ Movie rentals, available the same day a movie comes out on DVD, will cost $1.99 to $3.99 apiece. High-definition titles will be $1 more.
+ You can watch a movie as many times as desired over 24 hours.
+ The box's hard drive can store up to 100 movies at a time.