Disney-backed MovieBeam to Offer VOD HD Movies

A unique VOD HD movie service with earlier ties to the Walt Disney Co. this week initiated the first online delivery service of HD motion pictures to consumers.

MovieBeam, based in Hollywood, told Reuters it plans to offer first-run films from at least half a dozen studios in both SD and HD, including HD films from Disney and Warner Bros. Because it necessitates a separate set-top box and only provides movies, the VOD service will be targeted to heavy film renters (the ones who visit Blockbuster a couple of times a week or sign up for the three-DVD package with Netflix). It will be roll out this month in nearly 30 U.S. cities (including New York, Chicago and Los Angeles).

MovieBeam said in a statement its prices will be competitive with video stores (although retailers aren't offering high-def DVDs yet). What is expected to set the new VOD service apart from the pack is the HD content of popular movies. Technically, the new service plans to work around the limited number of high-capacity networks (required for HD) by using datacasting spectrum supplied by the Public Broadcasting Service, in a special transmission arrangement with the Alexandria, Va.-based network.

MovieBeam was founded by Disney a few years ago, but seemed to run out of steam by 2005. It was invigorated in January with nearly $50 million in fresh cash from Disney, Cisco Systems, Intel and three non-media firms. Reuters said Cisco plans to offer MovieBeam "film storage boxes" (set-tops) under its Linksys brand through diverse retailers such as Best Buy, CompUSA and Sears.