MovieBeam, the on-demand movie service that relied on broadcast spectrum for wireless delivery, is shutting down December 15, Engadget, the technology Web site, reported. The failure of the company comes after various investors provided over $100 million over the past four years.
Although no official announcement had yet been made by the company, Engadget and other news outlets reported that MovieBeam began calling customers last week with information that the service is ceasing operations and that certain customers are eligible for a refund on their hardware.
The motion picture service, acquired last spring by Movie Gallery, was to be a major test of broadcast datacasting. Available in 33 markets, it used television broadcast spectrum to send movies to a hard drive in the MovieBeam set-top box.
Through a long-term agreement with National Datacast (and its nationwide network of PBS stations), MovieBeam’s over-the-air datacasting technology provides a content distribution system that enables the simultaneous delivery of hundreds of digital movie files to millions of customers’ homes across the country.
The MovieBeam signal rides on top of the existing PBS broadcasting infrastructure. National Datacast provides MovieBeam with network coordination, management and monitoring.
National Datacast was formed in 1988 as a for-profit subsidiary of PBS. It was established to create technology-driven lines of business that would generate revenue for PBS and its member stations. National Datacast’s digital datacasting network emerged from PBS’ pioneering of closed captioning for the hearing impaired.
Walt Disney, which started MovieBeam in three markets in 2003, sold an undisclosed percentage of the company last year for $52.6 million in a private placement of preferred stock. Other investors included Cisco Systems, Intel and venture capital firms. The sale to Movie Gallery was reported at less than $10 million.
About 10 of the 100 movies stored on the drive were replaced each week through data sent over the wireless connection. The data was received on a small indoor antenna. The set-top box also had to be hooked to a telephone line for billing data. At the end, MovieBeam service was available in 33 metropolitan areas across the United States.