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Summary:

After four years in existence, MovieBeam has entered the pantheon of services that should never have been offered, but were nonetheless, and failed almost immediately. The service was shut down for good this week; all that’s left is information on the Chapter 11 filing of its […]

MovieBeam

After four years in existence, MovieBeam has entered the pantheon of services that should never have been offered, but were nonetheless, and failed almost immediately. The service was shut down for good this week; all that’s left is information on the Chapter 11 filing of its parent company, Movie Gallery.

Chapter 11 aside, many of us knew this day was coming. Long before it became the property of Movie Gallery, MovieBeam became the laughingstock of the VOD industry. So what, then, can be learned from MovieBeam’s failure?

At its height, MovieBeam’s service was “beamed” to local PBS channels in 30 markets through the use of a set-top box that allowed users to access the signals embedded in the channel using dNTSC technology. Once installed, users could rent movies for 24 hours at a time: $1.99 for an older release or $4.99 for an HD movie.

Although this may sound good on paper, the reality was altogether different. Walt Mossberg of The Wall Street Journal offered up a laundry list of issues that needed to be fixed, while HDBeat claimed that MovieBeam’s HD video was “the worst [they] had ever seen.”

But in the end, it wasn’t necessarily the wonky functionality of the service or the poor quality of video that made people ignore MovieBeam. Instead, it seems MovieBeam was a victim of its own technology — a technology that so far, people simply don’t seem to want. After all, do people really want to add another set-top box to their living rooms when they can download movies off their cable box or get films sent to them in the mail through Netflix? If we believe the figures — $10 million value after a $50 million investment — the answer is “no.”

As more set-top boxes hit store shelves, companies are being forced to find ways to bring a valuable experience to the people that buy them. Vudu thinks it’s doing the right thing with a service that mirrors that of MovieBeam’s, but drops the PBS integration in favor of viewing through the box. But perhaps the most vexing issue is whether or not people actually want this kind of service at all.

According to one industry analyst, people simply aren’t ready for a set-top box that can stream rentals to their homes.

“There’s not a success story out there yet,” said Michael Greeson, an analyst at research firm Diffusion Group. “A lot of people overestimated consumer appetite for these video services. The original models were really far ahead of the consumer market.”

In the end, companies like Vudu need to find ways to innovate in an industry in which companies haven’t entirely figured out what customers want. It’s a familiar story, one that has broken countless companies and industries alike. If nothing else, MovieBeam figured out what customers don’t want — and their failure may just help the rest of the VOD industry succeed.

Don Reisinger is a technology columnist who covers everything from Google to HDTVs. He currently writes for over 15 popular technology publications, including CNET’s Digital Home, InformationWeek and Future Publishing in the UK.

  1. Its not the set top box its the Bussiness Model

    People want a reasonable priced box that plugs into thier TV without any messing around .

    Also pay per view downloads are lame people want a on demand video service similar to cable TV.

    A netflix style subscrption service might work or ad supported service like Joost .

    A box if they charge for it also needs to be under $100 for such a service to become mainstream or it needs to be a value added service than works on existing boxes /consoles .Maybe deals with Sony .Microsoft and Nintendo and thier online services are needed to get the Mums and Dads interested .

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  2. Moviebeam failed to target the market it was intended for: those homes that do not spend money on cable or dish television. For those of us who refuse to support the cable monopoly, Moviebeam was a perfect solution. I hope PBS takes a look at Moviebeam as a product offering for them, since the signal was being broadcast over their airwaves.

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  3. [...] MovieBeam is emblematic of both the failures of video CE’s hardware past, and the futility of its future. After floundering for years, being bought and subsequently killed by Movie Gallery, MovieBeam is now in the process of being sold to Dar Capital for $2.25 million. Is that a bargain or a big waste of time and money? [...]

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