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Disney Open to Going Consumer-Direct for Movies, Media

5 Aug, 2014 By: Erik Gruenwedel

Disney's shuttered MovieBeam set-top box

The Walt Disney Co. is amenable to selling its movies, TV shows and related media directly to consumers, CEO Bob Iger told analysts.

Speaking Aug. 5 during Disney’s fiscal call, Iger was asked if the company would ever revisit MovieBeam, the former video-on demand service launched in 2003 by subsidiary Buena Vista that enabled users to rent digital movies through a $150 set-top box.

The concept never resonated with consumers and Disney spun MovieBeam off in 2006, after which it was acquired by (now defunct) Movie Gallery in 2007. Interestingly, MovieBeam existed before the arrival of the Roku media player and Netflix’s subscription streaming — two products that have since transformed home entertainment.

Iger said MovieBeam was likely ahead of its time and doomed to fail due to the pricey set-top box. But he said the concept of going direct to the consumer was a good one — and an idea Disney would explore going forward.

“I think [Disney] is very well positioned to [sell] product direct to the consumer. Right now we do that primarily in parks and resorts. I think we would in all likelihood grow our direct-to-consumer business around the media space, the movie space, and so on over time. I think that will be an important thing for the company in the future,” Iger said.

Indeed, Disney, which opted against joining Hollywood in the launch of UltraViolet, instead sells direct through Disney Movies Anywhere. The online service enables users to purchase digital movies or redeem codes from Disney packaged-media purchases and play digital files via connected devices, including Blu-ray Disc players.

Disney in March renewed a broadcast retransmission agreement with Dish Network that called for the creation of so-called "personal subscription service" options that would allow users (i.e. cord cutters) access to Disney content via less expensive over-the-top video platforms.

While the idea of going direct isn’t new, advances in technology have made the concept more consumer friendly. At the same time, Disney Studios is coming off an impressive quarter, driven in part by strong global packaged-media sales of animated hit Frozen.

The title has sold more than 13 million discs in the United States through the end of May, according to TheNumbers.com. Frozen ranks as the No. 1 selling disc in the United Kingdom through June 30, according to the British Video Association.

That reality prompted Iger to stress that the studio (and Walt Disney Studios Home Entertainment) maintains strong relationships with distributors, big-box retailers, multichannel video program distributors and over-the-top video services such as Netflix. Any consumer-direct initiative would have to complement that ecosystem.

“I think we can better service the consumer [directly] with Disney-branded products. But that doesn’t mean Disney will get out of the third-party distribution business. That would be an impossibility,” Iger said.

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