InCapta Inc (INCT)

[Sentinel]

DD: Datacasting and VOD Moviebeam

http://www.wicweblog.com/2006/02/will_data_broad.html

Will data broadcasting expand with MovieBeam's video on demand?

After testing broadcasting movies via PBS’ television datacasting network, The Walt Disney Company — in conjunction with Cisco, Intel and venture capitalists — is launching its MovieBeam video on demand service in 29 metropolitan markets in the United States, according to the press release.

The interesting question for the wireless industry is whether data broadcasting — one-way data transmission — will get a shot in the arm from MovieBeam. For decades there have been a variety of data broadcasting businesses in the United States, ranging from paging to background music to file storage. Virtually none of these ventures succeeded.

One of the few data broadcasting efforts that has been in business for years (15) is PBS National Datacast that uses the PBS television network to transmit data (see below). National Datacast has had several clients, and the MovieBeam venture is a major win for them.

How it works

MovieBeam provides a Linksys (Cisco bought Linksys) box, receiving National Datacast’s broadcasts, that’s attached to a television set, an antenna for the receiver and a remote control (see below). The box is preloaded with 100 movies and every week the list updates with up to ten new movies, including some in high definition.

MovieBeam - pictures of device

The receiver includes a 200GB hard disk drive and a 200 MHz microprocessor. It includes many audio and video inputs as well as an Ethernet jack and USB 2.0 port, “which will enable broadband connectivity later this year, giving MovieBeam the ability to add even more features and content to the service,” the release says.

In addition, Disney and Intel are working on developing a “USB peripheral that will, in the future, bring the MovieBeam service to other devices,” the release says.

What it costs

The Linksys receiver package costs $199.99, after an introductory $50 rebate, plus a $29.99 activation fee. The newer movies cost $3.99 and the older ones cost $1.99. An additional $1 charge is tacked on for high definition movies.

Subscribers are able to watch each movie for 24 hours for as many times as they want. There is no annual subscription fee or contract.

MovieBeam will be available in Atlanta, Baltimore, Boston, Buffalo, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Jacksonville, Las Vegas, Los Angeles, Memphis, Minneapolis, Nashville, New York City, Orlando, Philadelphia, Phoenix, Portland, Ore., Salt Lake City, San Antonio, San Diego, San Francisco, Seattle, St. Louis, Tampa and Washington, D.C.

Testing, testing

I tested MovieBeam for a few weeks for free at least two years ago in Chevy Chase, Md. It wasn’t commercially available, but I had connections!

The service performed as advertised and worked well enough. I assume there have been changes since then.

I’ve also written extensively about data broadcasting for more than 20 years and pondered in 2003 whether data broadcasting ventures, including Microsoft’s SPOT watch program, would help to reinvigorate the market.

So, I’m pondering again whether one-way data transmission will be jump-started with MovieBeam.

Sufficient demand?

Will enough people be willing to pay an upfront cost of $230 (box + activation) and a lower per-movie fee (in some cases) for MovieBeam rather than going to their local video rental store, using Netflix, subscribing to cable company video on demand or recording with a Tivo?

Tres Izzard, the chief executive officer for MovieBeam, say his company needs 500,000 customers to break even, according to an article in The New York Times.

Josh Bernoff, a vice president at Forrester Research with the Devices, Media, & Marketing team, doesn’t think MovieBeam will succeed. He writes, “Will this take off? Nah. We've learned over more than a decade of analyzing these types of devices that it's wicked hard to succeed with a new set-top box.

“MovieBeam won't get popular until it's a feature in other set-top boxes, like satellite boxes and DVRs.”

I guess we’ll know more about the demand for this data broadcasting service in six to 12 months.