Last week we made fun of Cisco and others for dumping $50 million into MovieBeam, Disney's failed movie-on-demand effort that would offer a bunch of movies on a set-top box, with the selection of movies rotating quietly in the background each week. The company (freshly separated from Disney, but still mostly owned by Disney) came out today with the details of its new offering -- and it's clear they've made some changes -- but not necessarily enough to matter. First, they got rid of the monthly subscription fee. That makes sense. Second, they've done deals with movie studios so they can offer movies the same day the DVDs get released. That could be a selling point for those who like to watch new releases, but don't like going to the video store. However, there are still quite a few hurdles. The $200 limited-use box, for example, is a big one. The $30 activation fee, and the per-movie fees that offer no benefit over rental prices also don't help. Also the whole "yet another set top box thing" is still an issue. If the company really wanted to push adoption, it should have taken the suggestion we made to TiVo years ago. Subsidize the boxes almost completely. Basically, give away the boxes. Take a loss on them, but once they're out there, people will be a lot more willing to try out and use the service. The real revenue opportunity here is in the service fees anyway. Why set up $230 hurdles to get people to try out the service? Maybe have a small fee to get actual buy-in, but otherwise, they've shrunk the market for their service considerably by worrying about the upfront costs. Yes, it would require a lot of money upfront, but the upside could be much higher. After all, this is really just a regular video-on-demand offering where the storage is local. Why price it so much higher than if the storage were remote?
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