Disney’s Moviebeam Investment Reaching $70 Million Mark

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Disney, which announced its Q2 results today, has an interesting bit in its filed 10-Q statement: its on-demand movie service Moviebeam is requiring some heavy duty investment to make it work, despite public statements on the low cost of deployment of the movie-delivery technology.

In a June story on Reuters, a company VP said that they could make it work for the whole of U.S. for about $50 million…the company has stressed in previous interviews that an important factor is Moviebeam’s low cost to startup — roughly $250,000 per city — because it uses standard broadcast airwaves to deliver DVD-quality movies.

In the 10-Q, the company said that it has invested $68 million to date (which includes investment in Moviebeam and the startup Dotcast, whose datacasting technology is enabling this service), and is prepared to invest about $55 million more over the next 3.5 years to see if it works. The service has been rolled out in three cities till now, and three more are expected this fall. (Arguably, most of the $68 million investment is in Dotcast).

Here’s what the company said in 10-Q about the future investment: “We are evaluating the roll out plans based principally upon the success of the venture in the initial markets and expect to expand into additional markets later in fiscal year 2005 or early fiscal year 2006. The assessment of the initial market performance will determine the long-term strategic direction of the business and the ultimate recoverability of the investment.”

Related:

Disney to expand MovieBeam video service

Will Disney’s MovieBeam Cut It This Time?

Disney’s MovieBeam Will Fade Like a Moonbeam

Disney Fueling The Rise Of Datacasting

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