MovieBeam was a video-on-demand service started by Disney, specifically its subsidiary Buena Vista Datacasting, LLC. Movies were sent wirelessly into the subscriber's home by embedding digital data ( datacasting) within local Public Broadcasting Service (PBS) stations' analog TV ( NTSC) broadcast to deliver the movies to a set-top box. The data was embedded using dNTSC technology licensed from Dotcast, and distributed to TV stations via National Datacast. Up to 10 new movies were delivered to the player each week. The player also contained free movie trailers, previews, and other extras.
The set-top box was sold for a one-time fee ($149.99 as of August 2007). The cost of viewing a movie varied from $1.99 for older movies in standard definition to $4.99 for newer releases in HD. Movie rentals expired 24 hours after the rental period began.
The box had high-end hardware, including HDMI, component video outputs, and coaxial ( SPDIF) and optical ( TosLink) digital audio outputs. The box also had USB and Ethernet ports, although these were not activated in the last release of the firmware. An HDMI or DVI connection was required to watch HD content, which was in 720p resolution.
MovieBeam connected to the servers by telephone line to trigger billing of rented movies. The modem may or may not have worked with VOIP lines, depending on the quality of the connection.
Disney spun off this company in January 2006. Cisco, Disney and several venture capital firms including Intel Capital, Mayfield Fund, Norwest Venture Partners and Vantage Point Venture Partners had invested $48.5 million in MovieBeam.
On March 7, 2007, Movie Gallery, Inc. acquired MovieBeam, Inc. Movie Gallery at the time stated that the expected cost of acquisition, plus operating expenses for 2007, was $10 million.
On December 5, 2007, MovieBeam began calling its customers informing them that MovieBeam would be ceasing operations on December 15, 2007, and on that date MovieBeam officially shut-down service.
The main reason for failure of the service to penetrate and capture a portion of the video-on-demand market was the presumption that viewers would watch those movies that the network thought they would be interested in. The dependence on precise positioning of the reception TV antenna to obtain movies was another big problem. Differences of a centimeter or two, or poor weather conditions, could cause movies to be missed being downloaded over-the-air. Cable TV and satellite TV set-top boxes now provide video-on-demand services with far better features than MovieBeam. The video quality of MovieBeam was greatly criticized by viewers due to excessive video compression, made necessary by using distribution via analog instead of digital TV ( ATSC). Analog TV broadcasting was already slated to end in the United States in mid-2009 (and subsequently did so). These and other challenges sealed the fate of this much-hyped company into a flop of technology history.