MovieBeam, the service that tried to deliver movies over a set-top box, has been sold for less than $10 million, a major loss for investors and sign of how quickly the movie industry is changing — and consolidating.
Movie Gallery, a major video rental company, is the buyer.
MovieBeam had tried to deliver its movies over a box costing between $100 and $200. People then had to download the movies. But few people want pay for such a box when there are so many cheaper alternatives, especially lately.
After losing $56 million in 2005 on the nascent video service, original owner Disney spun out the service last year, and MovieBeam got $48.5 million more in funding at that time from a group of Silicon Valley venture firms, including Mayfield, Norwest and VantagePoint, as well as Intel and Cisco. Disney retained a stake too.
But in less than a year, that effort apparently had failed. Movie Gallery said in its statement that it “expects that the total incremental expense related to MovieBeam, including the initial acquisition cost and any ongoing development expenses will be less than $10 million in 2007.”