MovieBeam, a startup originally backed by the Walt Disney Co. that signed up just 1,800 subscribers for its movies-on-demand service, has discontinued operations as parent company Movie Gallery reorganizes under Chapter 11 bankruptcy proceedings.
Rental chain Movie Gallery, which filed for bankruptcy protection in October, acquired MovieBeam earlier this year for less than $10 million.
MovieBeam used PBS transmitters in about 30 markets to deliver movies over-the-air to proprietary set-top boxes. The company had 30 employees when it shut down Dec. 15, a Movie Gallery representative told the Associated Press.
Disney began testing the MovieBeam service in 2003. After tabling the project two years ago, Disney spun off MovieBeam in January 2006 -- with the backing of investors Cisco Systems, Intel, Mayfield Fund and Norwest Venture Partners -- and relaunched the VOD service.
A notice on the MovieBeam Web site directs visitors to information about Movie Gallery's Chapter 11 filing. The site still prominently displays an offer to "Try MovieBeam Now For 30 Days Risk Free!" but no longer allows prospective customers to sign up.