MovieBeam service shuttered, stranding users with useless $200 box

“Movie rental service MovieBeam, once backed by Walt Disney, Intel and Cisco Systems, will close down Saturday, stranding people who paid $200 for its set-top box with a useless piece of hardware,” Brian Deagon reports for Investor’s Business Daily.

“The MovieBeam box stored 100 movies that were continually refreshed through a wireless connection. Backers invested some $50 million in the venture before selling it a year ago for $10 million to Movie Gallery, the movie rental store chain, now in Chapter 11 bankruptcy reorganization,” Deagon reports.

“The collapse of MovieBeam follows the recent sale of Movielink, a movie download Web site backed by big Hollywood studios that pumped $148 million into the money-losing venture. BlockBuster bought it for $6.6 million,” Deagon reports.

“Analysts say these services were in large part simply ahead of the times. But a new crop of players — including Apple, TiVo, and Netflix — believe the time is right. They’re looking to steal market share for fee-based movies, TV shows and videos from cable and satellite TV companies,” Deagon reports. “‘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.'”

Deagon reports, “Not even Apple, which launched Apple TV in March, has succeeded, at least not yet. Apple TV is a set-top box that delivers video from the PC, downloaded through Apple’s iTunes, to the TV set.”

Full article here.

MacDailyNews Note: Besides movies, Apple TV also plays music, TV shows, movie trailers, podcasts, photos, home movies, and YouTube videos.


  1. I’m looking into my crystal ball, and I see … What?! The exact same story repeated?! But … oh, wait, the mist is clearing. Okay, in a year and a half, a company closes its ill-advised, greed-based, money-losing service and its customers are left with their useless, paid-for devices. But instead of a MovieBeam box, these customers are left with … let me see if I can read the sticker … aaaah, yes, okay, it says “Sansa TakeTV video player”.

  2. I didn’t put too much faith in this attempt. Sorry, but I think one trick ponies in the living room take up too much space. Who wants an entire corral of gadgets lassoed by a mile of wires and twenty remotes to be saddled with? That’s a lot of shit! Not to mention the money you have to pony up.

    I have a Pioneer plasma with a Cablecard. Waiting for the TV or Mac Mini to finish growing to replace my DVD player.

    I don’t care about surround sound anymore. I may put in a Bose Cinemate, but that will be it.

  3. Apple’s box could also end up on the scrap heap, but at least the users will get good use out of them after they go out of production. As MDN said, there’s a lot of available content out there and it doesn’t rely on the “system” to provide it. iTunes and AppleTV are not hard-wired together and iTunes is not going anywhere, not anytime soon, except up. YouTube has no idea what system is feeding it to what screen.


  4. “I may put in a Bose Cinemate”

    Sweet; that’s the kind of addition to my home theater setup that I might actually consider–simple and intuitive, without a bunch of extra wires and remotes. And I agree with (what I think is) your larger point, that the last thing most people need these days is more complexity in our lives. Good enough is just fine, whether it’s two (or three) speakers instead of six (or seven), or a DVD player instead of a Blu-Ray or HD DVD player (I’d rather not repurchase my DVD collection, Mr. Media Conglomerate; you already suckered me into doing that with CDs). And while I’m a huge fan of Apple, I’m waiting for the Apple TV to grow up too. (There’s just enough space under my Panasonic widescreen to fit one, I think…)

  5. Digital music became successful with the wide spread use of MP3s, then MP3 players, then DRMed however flexable iTunes Music store.

    Once Video content is in either one format, or one device that can play all formats and the DRM is flexible it will succeed.

    I have an apple TV and an Xbox360. I was converting all of my divx and xvid content to Mpeg4, but now that the 360 supports both those formats, why should I go through such a pain in the ass long process?

    I still rip DVDs into Mpeg 4 so it will play on both, or my iphone, but I still want a nice easy single format that works on everything, or upgrade my Apple TV and iphone to work with any format and its just as easy.

  6. These ideas weren’t ahead of their time, they were stupid ideas. Basic laws of business, if you don’t have a consumer base, you won’t be in business long. Example, if your movie download business depends on people having T1 connections at home, that could be considered ‘ahead of its time’ – but in reality, it’s simply an impractical business move. When an impractical business move costs $50 – $150 million, that is simply a stupid move. The difference with the Apple TV, is it isn’t dependent on its service, without iTMS, I can still sync with movies I’ve ripped from my DVDs, and music from my CDs. I don’t even need to be connected to the internet, I can have an intranet between only my home computers, Mac or PC. Steve Jobs is a genius, because he solves the problems BEFORE they occur, he “skates to where the puck is going to be”.

  7. I use AppleTV and really like it a lot. I’m finding that I’m discovering TV shows because of it’s simplicity. The fact that I can watch them when I want to combined with the simplicity of purchasing only what I want to watch is sweet. But movie rentals are seriously holding this device back. Apple NEEDS to get movie rentals going, and then this thing is a smash hit.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.