Disney Digital Direct

From Disney to your home digitally – what middle men?

Walt Disney plans to start live tests this year on a digital home video distribution system which could bypass conventional rental services, undermine movie piracy, and deliver new profit streams directly to the group’s bottom line.

The announcement, from Michael Eisner, chairman and chief executive, marks an aggressive move to embrace digital technology in the home, which had been seen by many in Hollywood as more of a threat than an opportunity.

It is also a significant departure from the business model of Movielink, an internet-based service backed by five other leading studios, which allows viewers to download and watch films on their personal computers.

The Disney service, dubbed Movie Beam, will use a portion of the digital broadcasting spectrum used by its ABC over-the-air network, to feed up to 10 films a week into domestic television set-top boxes with a storage capacity of 100 full-length features. [FT]

And in the theaters:

The initiative follows an industry-wide commitment to press ahead quickly with the digital distribution of new movies via satellite or disc to servers in cinemas equipped with new-generation digital projectors.

Only a handful of US theatres are currently equipped with the system, which will cut costs by obviating the need for thousands of hand-delivered film prints, but industry officials said last month that a full-scale roll-out would start next year.