Reinventing the home theater experience is hard, especially if you aren’t in control of the content. Case in point: Kaleidescape, which has been selling high-end home media servers to home theater enthusiasts for thousands of dollars, has closed its doors and laid off all of its employees effective immediately, reports Engadged.

The company ran out of money and is now looking for a buyer, CEO Cheena Srinivasan told CE Pro. There is no word yet on how the closure is going to affect owners of Kaleidescape’s pricey devices.

Kaleidescape had been selling a number of movie players and servers, with the idea of offering consumers a way to access their DVD and Blu-ray libraries without the need to mess with actual physical discs.

Kaleidescape’s products initially allowed consumers to rip their DVD collections and store movies on internal hard drives. However, the DVD Copy Control Association, which owns the content protection used for most DVDs, sued, claiming that this was a violation of copyright laws. Courts agreed, and Kaleidescape eventually settled, phasing out the controversial copying feature.

Without the ability to rip movies, Kaleidescape introduced a disc vault capable of storing up to 320 physical discs for on-demand access, which sold for a whopping $14,000 at the time of launch. The company also introduced a licensed download store, which for the first time allowed consumers to download Blu-ray quality movies onto players with internal hard drives that sold for $3000 and up.

The question now is what Kaleidescape’s failure means for other attempts to re-invent the home theater experience with high-priced hardware that plays by the rules. One example for this is the Screening Room, the early release window startup backed by Napster investor Sean Parker. The Screening Room aims to woo consumers with the ability to watch movies that are still in theater for $50 a pop, while also requiring a $150 set-top box.