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Ghost Stories

20 May, 2003 By: Holly J. Wagner

Well, the Buena Vista test of the Flexplay expiring disc seems to be the topic of the week for the industry, so I might as well jump in.

I can't help but be amused at the rampant comparisions to Divx, the proprietary delivery system on which, according to published reports, Disney and Circuit City took a $130 million bath. Except for the two-day play window, EZ-D is not even remotely like Divx.

Why not? Because Divx required a separate set-top box. The discs wouldn't play on ordinary players and the set-top had to be wired to a phone line so someone at the headend could charge users for renewing content. Comparisons to EZ-D are misguided.

What is much more like Divx, however, is The Walt Disney Company's announced Mickey-come-lately foray into video-on-demand (VOD), MovieBeam.

The plan there is to rent proprietary set-top boxes to consumers. The boxes will come loaded with 100 titles and Disney will offer about 10 more per month for a fee, according to announced plans. If there are still a lot of unanswered questions about EZ-D, MovieBeam looks downright hare-brained by comparison.

I predict MovieBeam is destined to go the way of Divx for the same reasons it happened the first time: proprietary box, no portability and limited consumer choice.

Analysts have reacted the same way I did: are consumers really going to make room for yet another box in the house? Not likely. Especially not with the percentage of homes that already need a box for cable or satellite. Which, incidentally, offer several Disney channels as well as pay-per-view.

I had cable, but one of the reasons I kicked Time Warner to the curb (aside from absolutely dismal service and overpriced surcharges for digital programming) was the high fees to rent their set-tops and remotes. For two rooms, hardware was about 20 percent of the monthly cost of getting cable and digital service added another 10 percent.

While all the savvy programming providers are getting wise to space-conscious households and trying to consolidate devices into fewer and smaller boxes -- industry nemeses TiVo and ReplayTV, for example, are building DVD players into their set-tops -- Disney lumbers up like the adult elephants in Dumbo and will try to get consumers to pay for the privilege of putting another ugly box in the living room or family room.

And so far I've heard nothing about how installations will work as a practical matter. Is Disney prepared to hire and field an army of installers like the cable and satellite companies (which, by the way, often struggle to pay the field force)? Or just send these boxes through the mail and hope consumers can install them themselves, which would require on-demand tech support by phone? And all of this just to get only Disney content? Because, like Divx, other studios are unlikely to support another format. And what about the euphemistically named "universal" remote control. Will they work on MovieBeam boxes?

Sorry, Disney, I just don't see this one working. Call it MovieDream, because that's all it will ever be. Try putting as much whimsy and creative energy into creating the content as you do to protecting it and you just might be a going concern again.

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