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Disney Announces VOD Venture

8 Apr, 2003 By: Holly J. Wagner

Walt Disney Co.'s plan to debut a video-on-demand (VOD) service called Moviebeam in a trial rollout this fall may be more than another delivery channel: CEO Michael Eisner's remarks to the National Association of Broadcasters conference make it clear it is a shot across home video's bow as well.

“In the analog world, this business focuses on a structured sequence of release windows – from theatrical to video to pay-per-view to premium cable to network broadcast, etc.,” he said. “In the digital world, we will have to rethink and compress the sequencing in order to adjust to the fact that digital delivery will make possible quicker and more direct distribution to consumers.”

Moviebeam will use a proprietary set-top box that offers the same functions as a DVD player, according to a Disney fact sheet. It will operate as a direct-to-consumer service, bypassing cable, satellite and Internet service providers.

The service will use set-top boxes that can store 100 movies and will offer subscribers 10 new movies a week using existing broadcast technology, Eisner said. The rollout will take place in Salt Lake City and two other cities yet to be announced.

Trumpeting the company's long-past technological innovations – the first stereophonic TV broadcast, pioneering use of color in the Wonderful World of Disney,” Eisner said the company is “positioning ourselves to be on the leading edge of the next technological wave in entertainment.”

It seems a bit late for that, as Disney, which announced late in 2001 that it would provide movies over the Internet, is the last major studio to join the fray. Five of its peers, Sony/Columbia TriStar, Warner Bros., Paramount, Universal and MGM, are engaged in a VOD joint venture that yielded Movielink.com, which launched quietly last November. Lions Gate has an interest in CinemaNow.com, which has been up and running since 1999; and 20th Century Fox, which bailed out of a VOD partnership with Disney last April, just announced it will offer movies over CinemaNow's service.

Eisner has been a vocal proponent of government regulation and prosecution of digital piracy, lobbying for intervention at congressional hearings.

Moviebeam is an effort to thwart piracy,

"If we don't provide consumers with our product in a timely manner, the pirates will," Eisner said.

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