Movie Server Pioneer Kaleidescape Calls it Quits

UPDATE: As was reported on, Kaleidescape announced on Friday, September 9th that it had secured new funding and reopened its doors as a slimmed down operation with plans to continue selling its new Strato line. You can read the story here.

Kaleidescape, the company that pioneered the movie server category and waged an unsuccessful decade-long battle over the right to sell disc-ripping movie servers, has closed its doors.

Word of the closure was confirmed by industry trade publication CE Pro, which published an interview with CEO Cheena Srinivasan over the weekend in which he said “he never planned for this day.”

S&V contributor John Sciacca also spoke with Srinivasan and posted a story on the Residential Systems website earlier today. He wrote:

“…after confirming the bad news, it was clear that he was taking the decision incredibly hard. Throughout our half-hour call he repeatedly referred to the 70 Kaleidescape employees that had been laid off as family, and as a company that ran on passion. While Srinivasan accepted full responsibility for this outcome, ultimately it boiled down to a lack of funding, with the company perhaps taking on a bit too much in developing its latest product. Kaleidescape was a very engineering-heavy company that spent a lot of money on personnel and expensive new product development for its unique Internet Movie Store ecosystem to pivot the company from its disc-based past.

…In March 2014, Kaleidescape was dealt a blow in a court loss to the DVD-CCA {DVD Copy Control Association], over a contract dispute case related to copying DVDs. Not only did this cost the company millions of dollars in legal fees and years of lost focus, it also meant the end of disc importing, the very feature the company was founded on. Resolving that lawsuit, however, allowed the company to move forward and establish studio relationships and unique licenses that ultimately led to “Kaleidescape 2.0” as the company pivoted to become the only premier digital media content delivery solution for home cinemas. While many think this lawsuit was the crux of Kaleidescape’s issues, it was never mentioned by Srinivasan in our conversation.

Rather one of the biggest contributors to the company’s current situation, according to Srinivasan, was a bad “bet” selecting a silicon supplier for 4K Ultra HD and HDR technology. “It is a major product transition, and we were on the leading edge of the technology curve as a small, under-capitalized company,” Srinivasan said. “And, because it was a whole new platform, it took much longer than expected to complete. And, we got caught with some bad, bad luck the last week of January this year.”

…Srinivasan said the company has exhausted its financial resources, and attempts to raise capital didn’t materialize in a timely manner to extend the runway to deal with the transition and volume ramp up to new products.

Kaleidescape is looking for a buyer but has not yet finalized a deal. Srinivasan said he expects the company’s assets to be sold within 30 days.

The company’s web site is still active.

Read the complete Residential Systems story here.

JustinGN's picture

There goes my dream movie/media setup. I'm not surprised this happened, given their DVD CCA loss, but it's still incredibly disappointing. I'd been saving up for a proper M-CLASS system for years, ever since I first saw their DVD ripping and storage system when buying my first B&W 600 speakers. I was thrilled when they pushed into the retail consumer realm with their Encore series, and was actually going to shift the funds toward a Tera server next year instead.

At the end of the day, though, I guess the biggest problem they faced wasn't just the DVD-CCA loss, but their staunch refusal to get into cheaper consumer areas sooner. That interface was stellar enough to warrant cheaper, subscription-based hardware in my opinion, and their movie store was a brilliant idea of combining digital copy craze Ultraviolet with premium BD content/downloads.

I'm hoping someone buys them and finally rights the ship. There's a place for their stellar hardware, but there's an even bigger market for their best-in-class UI/UX. I'd gladly pay $100 to $200 a year for it on my AppleTV, for instance, with my Synology acting as storage. At the very least, please don't let the code base rot in some copyright troll's library, guys. If you won't sell it, at least open source it. Don't let excellent work rot.

eugovector's picture

Plex. Buy Blu-rays, rip with MakeMKV, play back with free Plex via your device of choice. Want more? Extra pro features available for $5/month or a one time fee of $150. Do you have more money than time? Have a Pro set it up in your home for only $299.

Seriously. Anyone sad about this has never used Plex.

JustinGN's picture

Plex lacks the rich metadata and user experience Kaleidescape was renowned for, and still isn't a decent media server in my book, especially when it comes to transcoding content. Furthermore, while MakeMKV is impressive (I use it myself), support for MKV containers by major companies is still limited, and even when implemented, usually precludes the use of high bitrate/lossless audio streams packed on discs to avoid such use in the first place. Perhaps when Sony, Apple, or Microsoft finally support bit-perfect disc copies stored in MKV containers, including metadata, I'll give it another go, but that's a long ways off if it ever happens.

Kaleidescape played to a niche market, failed to adapt to changing market conditions, and refuse to bring in consumers from lower price points. The DVD CCA merely finished them off, as they were never in a position to bandage over that gaping wound with $3500 disc carousels.

eugovector's picture

MKV is just a container. The Blu-Ray rips I've produced are identical bits and audio streams to the blu-ray. No additional compression, just a new container.

What do you find lacking about the transcoding of Plex? I can watch on every device in my home or pocket, including syncing for travel offline, with no issues. Can't do that with Kaleidescape.

I will grant you the metadata was more rich and meaningful on Kaleidescape and ease of bonus footage edge went to Kaleidescape, but bonus footage can be additionally ripped and stored with the main movie in Plex. I generally don't find bonus footage that compelling, so this isn't a big issue for me.

I think if you explore Plex a bit you find it much more functional at a fraction of the price.

JustinGN's picture

You don't need to preach to me about Plex! I used it for a while back before it went subscription for remote access, and still have it on the Synology for my Android flatmates to access content through (or did, until I setup dsVideo). Also, while I'm aware that MKV can essentially hold bitperfect audio/video for BD/DVD discs (menus included!), the problem comes on the playback end, where the only devices that support that playback are cheap, kludgey, no-name devices from China. Until I can get some more mainstream support (or better yet, just let me rip the encrypted disc to a format that *is* supported by mainstream devices!), it's not a reasonable solution comparable to Kaleidescape.

Quality in all aspects of playback is important to me.

eugovector's picture

A PC of your choice will easily stream bit-perfect Blu-ray. I use an 7-yo Celeron with a $20 Nvidia card, no problem. For the more adventerous, the Odroid C2 running Open PHT from the Rasplex group promises a $60 solution. My boards on the way and I'm a total linux newb, so I'll have a good sense of how a basic user could craft something similar after I learn my way through it.

For those looking a little more turnkey, the Nvidia Sheild is a $300 solution that has massive support from the official PLEX developers, but still has a few wrinkles.

Do we need a true turnkey solution, a Roku, Amazon Fire, Chromecast, Apple TV device, sub-$100 that does PLEX perfect with full Audio/Video? Yes. But in the meantime, maybe our definitions of reasonable differ, but a little elbow grease and self-teaching leaves $4K in my pocket over Kaleidescape.

rhirschey's picture

Plex is bit perfect, and my Oppo BDP-103 proves it. I can stream from my plex server and things are exactly the same bitrate (both audio and video) as if I were playing the Blu-Ray. Hi-res audio is sent along just fine, and both the Oppo and my Onkyo processor validate the audio format and bit-rate as at every point in the chain. As good as Kaleidescape may have been, Plex I can assure you gives the same level of access to an entire library of movies and for far cheaper....and I bet with a heck of a lot less dealer maintenance.

eugovector's picture

Good to know the Oppo offers another option. You don't get the nice Plex interface due to lack of native app though, right? Or did they develop one?

We're easily less than a year away from a simple PLEX solution for low-cost, full AV playback, and what exists now is pretty damn good considering the price.

rhirschey's picture

No, you don't get the nice Plex interface due to lack of a native app, but bit-perfert streaming for both audio and video are definitely there. I agree with your comments above that devices like Apple TV 4 are perhaps just shy of perfection on the client side (for varying reasons)...I at times use my Tivo Roamio OTA which is decent but is limited to 720P since it's using the Opera browser apparently.