Jeffrey Young, author of iCon Steve Jobs : The Greatest Second Act in the History of Business, sent me his take on MovieBeam, a video on demand service spun out of Disney and backed by Cisco and Intel.
A couple of weeks after Disney agreed to buy Steve Jobs' Pixar, the Mousketeers announced a new product from a spun-off subsidiary called MovieBeam that is so "brain dead" as the turtle-necked one would say, that you've got to wonder what they're smoking in Burbank. As far as I can see, Steve, John Lasseter and the hordes at Pixar can't get down to the House of Mouse fast enough, because if this is the kind of high tech idea that the supposedly technogeek Robert Iger has greenlighted, Disney is really in trouble.
Project Moonbeam--er, MovieBeam--essentially broadcasts recently released movies over the air in an unused portion of the current television broadcast spectrum, downloading them at a snail's pace to the hard drive in a set-top box that a poor dumb subscriber (dare I say sucker?) has to buy upfront. You pay $250 for the thing--and it is one ugly sucker with an unwieldy remote and no DVR or DVD burner, go figure!--then pay an activation fee to boot. Voila, you now have the privilege to buy individual films at prices that range from $1.99 on up at about the same time they are released to pay-per-view services or show up on DVD at your local video rental shop.
Now let's deconstruct this. The MoonBeam service slowly downloads movies to the box on its own, and stores about 100 movies, even some in HD format if you select that option. When you turn it on you get to select from what the programming whizzes are offering--you can bet that Disney films like Lion King 1 1/2 or High School Musical are going to be prominently displayed--and then you pay for the movie. Now you get 24 hours to view it. Isn’t that great! Hopefully you won’t fall asleep one night, and find that your kid has a school play the next, and by the time you get back "Poof!" your investment is gone. Oh, and don’t try and record it to your DVR or DVD burner because Moonbeam is so crammed full of encryption features that you, the "presumed guilty until proven innocent" customer won’t be able to. (Unless of course you're a full blooded hacker, in which case you'll have already sold all the movies in HD to your local pirate for pieces of eight.)
Maybe Steve Jobs' famed reality distortion field already beamed down to Burbank…but somehow it took on a reverse polarity in the process. One of Steve's big issues with iPod and iTunes was that users had to "own" the songs they bought. He has been consistently dismissive of rental services, and he is right. (Of course, in typical Steveian fashion, you can only own songs you buy from him in Apple's AAC format, but no matter.) Furthermore, think how dead in the water the iPod story would have been if he had made you buy a special box which was big and clunky and could only be used in your house, that cost hundreds of dollars, and that used some old world slowband transmission technology to get the songs to you…and then forced you to choose from a limited set of music that he liked and they evaporated after a week or so. (Lots of Bob Dylan, U2 and Joan Baez? Does anyone have Steve's iPod playlist? Send me your versions.) iTunes wins because it makes use of a big expensive box you already own (a Mac or PC), uses a fast worldwide transmission scheme that will only improve over time (broadband Internet), gets you to buy a small device you can carry anywhere that is cool, lets you buy the content so it is yours, and makes you a partner not a potential thief who has to be hamstrung.
Is this so hard to understand? Not really. What is even more fascinating about this deal is the investors who've ponied up to help Disney go to market by financing this brain-dead company: Cisco, Mayfield etc. I guess it just shows that in today's marketplace even bad ideas can get funded--maybe the bubble is coming back after all. If it succeeds, Project Moonbeam will also prove the truth of P.T. Barnum's eternal dictum, carried into this digital age: "There's a sucker born every minute."
Personally, I'm not going to cancel my NetFlix subscription anytime soon.