MovieBeam, Inc. today introduced the new MovieBeam System and launched its movies-on-demand service in 29 major metropolitan areas across the U.S., including New York, Los Angeles and Chicago, reaching nearly half of all U.S. households. The MovieBeam movies-on-demand service provides instant access to an ever-changing lineup of new releases and other popular favorites from virtually every major Hollywood studio. There are always 100 movies immediately available, with up to 10 new titles automatically delivered digitally each week – including select movies in high definition (HD) – via MovieBeam's exclusive, low-cost over-the-air datacasting technology. The MovieBeam System is composed of: 1) a set-top box that stores, protects and plays movies; 2) a small indoor antenna that receives new movies to automatically refresh the selection; and 3) a simple remote control that facilitates navigation of the intuitive user interface.

MovieBeam, Inc. is a newly formed venture backed by The Walt Disney Company, Cisco Sytems, Intel Corporation (through its leading venture capital arm, Intel Capital), Mayfield Fund, Norwest Venture Partners and VantagePoint Venture Partners (see today's related announcement).

"We have built MovieBeam to directly address what's most important to our target customers: convenience, quality and choice," said Tres Izzard, president and CEO of MovieBeam, Inc. "Our target customers are movie lovers who want a more convenient way to rent the movies they want to watch when they want to watch them and value the overall quality of the experience. MovieBeam provides an attractive alternative to other options – bringing the sizable selection of the back wall of the video store directly into customers' living rooms. Movies are always available for instant viewing, with no trips to video store, no out-of-stock titles, no damaged discs, no late return fees and no waiting by the mailbox for DVDs."

"MovieBeam, with its easy-to-use service, breakthrough content rights, and low-cost delivery platform, is serving a previously unmet need in the marketplace – providing consumers with a more convenient, higher-quality movie-rental experience through an unmatched combination of content, technology and relationships," said Gerry Kaufhold, principal analyst, In-Stat. "As a stand-alone company, with a strong investor syndicate, MovieBeam is well-positioned to become an important player in the digital entertainment business by delivering on the promise of on-demand movies."

Key features of the new MovieBeam offering include:

• Every new release and select popular favorites from virtually every major Hollywood studio, with 100 movies always instantly available and up to 10 new titles automatically delivered each week
• Unprecedented access to high-definition movies – with specially selected titles in native HD format and an HDMI connection that up-converts standard-definition content when connected to an HD TV
• Breakthrough content rights, including select titles from a major studio day-and-date with DVD release
• Full playback functionality, with familiar controls such as Pause, Stop, Fast-forward and Rewind
• Intuitive user interface that sorts movies by title, genre, actor/director and rating
• Free full-length theatrical trailers for every movie available for rental
• Pay-as-you-go model, with no subscription fees and no annual contracts
• Simple set-up, requiring no professional installation or special equipment
• Personalized spending limits and parental controls

Availability and Pricing

The MovieBeam service is now available in 29 metropolitan areas across the U.S., reaching more than 40 million households. Included in the initial markets are: Atlanta, Baltimore, Boston, Buffalo, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Jacksonville, Las Vegas, Los Angeles, Memphis, Minneapolis, Nashville, New York City, Orlando, Philadelphia, Phoenix, Portland (Oregon), Salt Lake City, San Antonio, San Diego, San Francisco, Seattle, St. Louis, Tampa and Washington, D.C.

The MovieBeam System is sold by major national consumer electronics retailers including Best Buy, CompUSA and Sears, as well as regional and independent retailers in the markets in which the service is available. It will also be available through several national Internet retailers. Additionally, the MovieBeam System can also be ordered at www.moviebeam.com or 1-800-MOVIEBEAM.

"Consumers are outfitting their homes today with high-end audio and video equipment to create a theater-like experience within the comfort of home," said Mike Mohan, vice president for home entertainment at Best Buy. "High definition content really makes home theater come to life with enhanced picture and sound. By offering unprecedented access to high-definition movies and appealing to the entire family with a broad array of entertainment options, MovieBeam is potentially accelerating consumer interest in the high-definition experience."

The advertised price of the MovieBeam System is $199.99 after an introductory rebate of $50. There is a one-time service activation fee of $29.99. Movie-rental prices are $3.99 for new release titles and $1.99 for library titles – with a $1 premium for HD movies. Each rental covers a 24-hour viewing period during which customers can watch a movie as many times as they like, with full video playback functionality. There are no annual contracts or monthly subscription fees.

Technology

The MovieBeam player features a 160 GB hard drive and a 200 MHz central processing unit (CPU). The player easily connects to virtually any television set, with video connection ports including HDMI, component, S-video, composite and audio connection ports including digital coaxial, SP/DIF, HDMI and left/right stereo audio. MovieBeam supports advanced audio and video formats, including Windows Media TM 9/VC-1 and Dolby Digital 5.1 TM.

With this flexible platform and PC-compatible digital movie files, the MovieBeam service can in the future be extended to other devices. As part of Intel's investment, the two companies are collaborating to develop a USB peripheral that will, in the future, bring the MovieBeam service to other devices.

The player also features Ethernet and USB 2.0 ports, which will enable broadband connectivity later this year, giving MovieBeam the ability to add even more features and content to the service. The player is co-branded with Linksys, a division of Cisco Systems and a leader in home networking devices, as part of Cisco's investment in MovieBeam. The two companies intend to explore future joint development opportunities.

Through a long-term agreement with National Datacast (and its nationwide network of PBS stations), MovieBeam's exclusive over-the-air datacasting technology provides a low-cost content distribution solution and enables the efficient, secure and simultaneous delivery of hundreds of digital movie files to millions of customers' homes across the country. The MovieBeam datacasting signal rides on top of the existing PBS broadcasting infrastructure and National Datacast's 15 years of experience provides MovieBeam with a distribution solution including network coordination, management and monitoring.