Disney to charge for 'on demand' movies on TV

Los Angeles Times

For almost 50 years, Walt Disney Co. has been entertaining the public on television for free. Now, in a new twist on old technology, the company plans to use local TV airwaves to entertain the public for a fee.

Disney is poised to offer movies "on demand" in three cities this fall, with a national rollout slated for next year.

For a few dollars per flick, customers with set-top boxes attached to their TVs will be able to start, pause, rewind and replay movies as if they were on tape or DVD.

This sort of on-demand service is widely viewed as the future of home entertainment, and other major Hollywood studios are well ahead of Disney on that front.

But though Disney's competitors have lined up behind the services on cable TV or the Web, Disney is spending an undisclosed amount of money to develop its own service, called MovieBeam.

It's a risky strategy, and analysts are pessimistic about the prospects. Not only does Disney face stiff competition from cable operators, it has to persuade consumers to add yet another set-top box to the pile around their TV sets.

"If the idea is to just get this off the road and target some sort of niche, there's some chance," said analyst Adi Kishore of the Yankee Group, a research firm.

That's important to Disney Chairman Michael Eisner, who has publicly called for the company to establish direct pipelines to the consumer, Kishore said.