A three-city test of the monthly subscription-based movie service did not draw enough interest to sustain the model.
On the surface, the MovieBeam model doesn’t sound like a bad idea. A monthly fee of $8.99 would provide users with a special receiver. MovieBeam would utilize unused television broadcast spectrum to send up to 100 movies over-the-air to the receiver.
Users could then watch movies on the device by paying a rental fee for each one they wished to see. Response to the three-city test was underwhelming, according to PaidContent.org, and now Disney has told the SEC in a 10-Q filing that it will incur a $24 million USD impairment charge in the third quarter related to the service.
That charge comes after a second quarter write-off of $32 million related an investment in the company that provided MovieBeam’s technology. Despite the write-off, Disney will still pursue other video on demand (VOD) options. A global initiative involving Swiss digital security firm Kudelski Group will see the Mouse offer a set-top box containing a digital video recorder (DVR) with VOD capability.
It seems as though the venture may have succeeded with a better pricing structure. The Netflix business of charging a monthly fee for DVD rentals by mail has seen it aggressively price its service starting at a flat $9.99 per month. That plan lets user have one DVD at a time, which must be returned before receiving another.
MovieBeam was been costly by comparison, and its convenience apparently was not enough to offset that.
David Utter is a staff writer for murdok covering technology and business. Email him here.
