Matchstick snuffs out Firefox-based streaming dongle

Matchstick, the dongle intended to challenge Google's Chromecast in streaming video and music to your television, is no more.

The team behind the HDMI media-streaming stick announced Monday it has decided to cancel the unreleased product and refund all the money raised in a wildly successful Kickstarter campaign last year. The developers blamed challenges related to digital rights management -- the process of copy-protecting digital media -- for the decision.

"After struggling with the DRM development based on Firefox OS for most of this year, we realize continued development of DRM, though showing early signs of promise, will be a long and difficult road," the developers explained in their Kickstarter page. "We have come to the conclusion that we will not be able to reliably predict the completion date of the DRM development without significantly more research, development and integration."

Slated to be the first streaming stick based on Firefox OS, the open-source operating system built by Mozilla, Matchstick was designed to connect to an HDMI port on a television to stream content from the Internet via a computer or mobile device. It was intended to go head to head with Chromecast, which provides a similar service. That device, which costs $35, also allows users to stream content ranging from Netflix to YouTube to HBO Go.

On its Kickstarter page, Matchstick promised that it would have major content partners lined up by the time the dongle is shipped to consumers, including working with apps like Netflix, HBO Go and Pandora. It was also expected to stream from devices running a wide range of mobile operating systems, including Firefox OS, Google's Android, and Apple's iOS.

The device was originally expected to ship in February at a retail price of $25, but the developers announced earlier this year it was delaying the launch until this month to make improvements to the hardware such as beefing up the device's power with a bigger processor and ironing out some Wi-Fi issues. The team also said that DRM was becoming an increasingly challenging issue for the team.

"DRM is a barrier and has become our primary focus, and as we work to nail that down we continue to explore new opportunities to upgrade the entire Matchstick experience," Matchstick developers warned in February.

Matchstick's developers conceded that it had difficulty securing content deals based on its DRM.

"Ultimately this was a content issue, yes," said John Rodriguez, president of Stage Two, the company behind Matchstick. "My firm also launched PLAiR (acquired by Samsung) before Chromecast so we know the space well. We identified that the product would have to satisfy mainstream users to be a viable player in the OTT [over the top content] space. The open source thing would only take you so far. Bummer. We had high hopes for the brand and the opportunity."

When Matchstick launched its Kickstarter campaign in September, thousands of eager donors flocked to the crowdfunding site to back to the project, helping the developers meet their funding goal in only one day. The campaign ultimately raised more than $470,000 from more than 17,000 backers.

The developers also said it would refund 100 percent of that money raised to its backers.

"You have been very patient with us, and we feel announcing another major delay in the Matchstick delivery would not be fair to our backers," the Matchstick team said. "We apologize for not being able to update you sooner."