Movie Gallery, the second-largest video rental chain, with 4,600 locations in North America, said it will sell the in its Movie Gallery and Hollywood Video stores. But the acquisition is part of a longer-term strategy, in which the Blockbuster competitor plans to use the service as a jumping-off point for other methods of digitizing and delivering video content to customers, including offering movie downloads and streaming video, Movie Gallery said in a statement.
Originallyas a way for frequent movie renters to avoid trips to video stores, the deal appears to underscore the .
Initial ideas for MovieBeam were ambitious, but the company has not managed to effectively compete with other types of services that bring video content directly to the home. Video-on-demand is now available from many cable providers, and TiVo, Netflix, Amazon .com Unbox and Apple are all bringing major studio titles directly to consumers.
MovieBeam did not return requests for comment.
The service is currently available in 31 major markets nationwide. Disneyin early 2005 and eventually spun it off as an independent company. MovieBeam was relaunched in February of last year with financial backing from and Intel.
For a $199 fee, the MovieBeam box can store up to 100 new releases each month, and individual movies can be viewed for $3.99 at any time. The service uses a technology called "datacasting" to wirelessly deliver content to each box using TV signals.