p2pnet.net News:- Disney is so petrified of anyone stealing its content that it has also separately developed self destroying DVDs with another technology partner, which will survive only 48 hours once the packaging is removed.

It should instead beat a path to the door of DivX and use its technology for protected internet downloads.

Disney decided to wait until 2005 to sort out what to do with its MovieBeam service that beams 100 movies through the airwaves, straight to a set top.

The entertainment giant wants us to believe that it is thinking about just how to go about partnering before it rolls out a service that it has confidence in and that is an unqualified success.

The delay is at least until late 2005 but may be right into 2006, said the company.

MovieBeam uses what is called datacasting, using spare bandwidth in a TV transmission signal, to send films over the airwaves to a DVR in a set top. Disney is offering 100 or so films and charging between $6.99 and $8.99 a month (a bit less than the DVRs from cable and satellite companies) and then charging per film, selling a 24 hour viewing window.

When it was first announced Faultline said that the US public needed another set top like a hole in the head and that the choice of 100 films, especially if they were only Disney films, would cave in to VoD services offering thousands.

At least Disney didn’t try to go it alone and has invited other content onto its Moviebeam system, but having spent some $68 million on a commercial trial including any investments it has made in technology supplier Dotcast, the plans to expand to three more territories was going to be more than Disney management could comfortably afford.

Imagine what the company could have delivered if it spent $68 million on delivering films over the internet, but never mind.

The delay was posted in its 10Q form filed at the SEC and it said that Disney has licensing arrangements under which it will have to pay an additional $55 million over the next three and a half years if it continues to pursue this business.

That’s a big $55 million disincentive to continue. The company said ‘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.’

A Reuters report suggested that the technology could be embedded into existing set-tops and offered more widely, but that would mean doing a revenue share deal with whoever paid for the set tops (cable or satellite companies) or the manufacturer of the set-top which would be Motorola, or Scientific Atlanta or one of the big Japanese or European consumer electronics companies.

Currently each box made is costing Disney something like $300 which would take it over 4 years to recoup in monthly fees and it needs the price down to about 25% of that before this is viable. Any self respecting technologist would take one look at the technology and kick it out as a fantastic waste of bandwidth and substitute it, within this business model, with long range, non-line of sight broadband wireless, such as WiMAX, for distribution.

Peter White - Faultline, UK

This entry was posted on Monday, September 6th, 2004 at 2:08 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

HOME

Viewed 1816 times