MovieBeam, an early attempt at creating a consumer facing set-top box and accompanying movie service, has closed its doors after fours years in business.

Originally founded by The Walt Disney Company and later sold to U.S. video rental chain Movie Gallery, MovieBeam was designed to bypass Cable and Satelite providers by beaming movies wireless into the home. The set-top box came with dozens of movies already stored and ready for rental (at $5 a pop), with forty new titles refreshed each month. In total the device could store around a hundred movies at any one time.

Meaghan Repko, a spokeswoman for Movie Gallery, told Reuters that MovieBeam had 30 employees and 1,800 subscribers when it shut down, and that subscribers who joined the service in March or later were being refunded the cost of the set-top box.

From YouTube’s continued dominance, the television networks’ newfound willingness to experiment online, the rise of the desktop Internet TV application, and a number of new PC-to-TV devices and set-top boxes — it’s been a big year for Internet TV in all shapes and forms. In this post we look back at 2007 through the lens of last100’s coverage, highlighting some of the important stories and trends, and how they point to what we might expect for Internet TV in 2008.

Also see: Digital music: 2007 year in review

YouTube dominates

While the market for Internet TV is growing steadily — survey after survey shows that people are consuming more video online than ever before — as 2007 draws to an end, Google-owned YouTube is still the number one video destination site.

This isn’t just true in terms of traffic but also in terms of “mind share”; when people talk about online video they often refer only to YouTube. As a result, a number of hardware companies have added YouTube support to their devices in 2007, such as YouTube-compatible cameras and mobile phones capable of viewing and publishing video to YouTube.

And then there’s the strong relationship between Google and Apple, which this year has led to YouTube support being added to both the AppleTV and iPhone, with a change in the video format to boot. Apple successfully persuaded YouTube to start re-encoding its video catalog to the much higher quality (and Apple-preferred) H.264 codec.

Not one to rest on its laurels, YouTube introduced a number of new features of their own, including a redesiged player, the introduction of interactive overlay ads, better copyright filtering, and — like many Google properties — improvements to its mobile offering.

More evidence of NBC Universal’s anybody-but-iTunes strategy comes with news that the company is partnering with SanDisk. Reuters reports that as of January new shows from NBC’s broadcast network and cable channels will be available on Fanfare, SanDisk’s newly launched Windows-only video download service. The initial content lineup will include “The Office”, “Heroes” and “30 Rock.”

Fanfare, in combination with SanDisk’s TakeTV device, offers a way of getting paid-for video content downloaded via a PC onto a television. We’ve previously covered TakeTV, where we described it as taking a much simpler approach compared to the many media extenders on the market by negating the need for a home network. “Instead, content is physically shuttled from a PC to a TV via a dedicated USB stick and docking station.”

Meanwhile, Vudu’s set-top box (see our review) has landed some television content of its own. Crave reports that, as of today, TV episodes from Fox are available for purchase priced at $1.99 each, the same price as TV shows on Apple’s iTunes Store. The lineup covers twelve shows including “24”, “Buffy the Vampire Slayer”, “Family Guy”, and “My Name is Earl”.

Microsoft to Sony: anything you can do, we can do faster.

After we got over excited about the PlayStation 3’s forthcoming support for DivX video, Microsoft’s XBox 360 has beaten Sony to the punch. The console’s latest software update adds DivX (and Xvid) video playback, which, after extensive testing, Gizmodo happily reports that in terms of DivX-compatibility, the 360 can now “play back pretty much anything”. Technically speaking, however, only DivX 5.0 and above is supported, which luckily should cover all but the oldest of DivX files floating around the web.

Adobe have announced the release of Flash Media Server 3, the latest version of its delivery platform for the company’s near ubiquitous Flash technology. Over at our sister blog, Read/WriteWeb, Josh Catone has the scoop, and says that “the most striking change to Flash Media Server is the drastically reduced price”.

Because in the past Flash Media Server has cost so much (upwards of $45,000 per license), streaming flash media has long been a very cost-prohibitive endeavor. The high price, commonly referred to as the “Flash tax,” led many to seek out alternative media servers like the open source Red 5. The latest version of Flash Media Sever, which will ship in January 2008, will be come in three versions, ranging from free to $4,500 — a price drop of 90%.

The Flash Media Interactive Server 3, the most expensive of the offerings, will provide more scalability and a robust new plugin architecture that its lower priced counterparts don’t offer. But for single server deployments, the $995 Flash Media Streaming Server, should be sufficient and could be attractive for smaller media publishers. Adobe will also offer a developer version for free that supports up to 10 concurrent users.

Other important developments in Flash Media Server 3: the debut of streaming HD video. FMS3 will offer H.264 video streaming, as well as support for High Efficiency AAC (HE-AAC) audio that can be streamed to Flash player, AIR applications, or Adobe’s Media Player app.

In addition to the Flash Media Server 3, Adobe also announced that Flash Player 9 Update 3 (codenamed “Moviestar”) has left public Beta and is available for general download as of today. We’ve previously written about “Moviestar”, noting its support for the more efficient H.264 codec, which is capable of delivering much higher quality video using the same bandwidth as the legacy Flash video format.