WALT DISNEY - VIDEO RENTER BUYS VIDEO-ON-DEMAND PROVIDER

Movie Gallery, the struggling Avis of the video rental business, said Wednesday that it had acquired MovieBeam, a service that transmits movies on demand via a TV settop device. Since movies are made available on MovieBeam 45 days after they are released on DVD, they do not conflict significantly with Movie Gallery's in-store offerings. Terms of the deal were not disclosed, but analysts speculated that Movie Gallery paid less than $10 million. Users of the MovieBeam service, which was originally nurtured by the Walt Disney Co., purchase the settop box for $100, which comes preloaded with 100 movies. Owners then pay $1.99-$3.99 to rent a film for 24 hours. Meanwhile, newer movies replace some of the older ones automatically via an over-the-air technology. Unlike other VOD services, MovieBeam does not require an Internet connection.

08/03/2007