Media & Retail 06 Feb 2007 07:37 am

Wal-Mart Goes into the Movie Download Business

by Sean Hackbarth

Movie reel

Wal-Mart (WMT) is jumping into the digital movie download market almost like they’re a innovator. Sure, having customers pay someone for movie downloads isn’t new, but the world’s largest retailer is bringing something new to the table: more flexible pricing and price competition:

The nation’s largest retailer is using its buying power to beat the prices charged by other download services in many cases, offering films from $12.88 to $19.88 and individual TV episodes for $1.96 — 4 cents less than Apple Inc.’s iTunes store.

Apple charges less for some films sold on iTunes — $12.99 when pre-ordered and during the first week of sale, or $14.99 afterward. But it only carries films from two studios, The Walt Disney Co. and Viacom Inc.’s Paramount Studios.

Most studios have resisted signing deals with iTunes in part because of Apple’s desire to sell movies at one price. Studios prefer variable pricing such as Wal-Mart is offering.

Apple’s pricing has also caused scuffles between studios and major retailers, including Wal-Mart and Target Corp. The retailers don’t want studios to sell digital copies of films cheaper than the wholesale price of physical DVDs.

Wal-Mart’s online store will sell older titles starting at $7.50, compared with the $9.99 charged by iTunes.

From the looks of things something has gone seriously wrong. It may be a beta but it has to at least be viewable.

Ugly Wal-Mart movie download beta screenshot

With Wal-Mart in place movie studios are set to make more deals with the likes of Amazon (AMZN) and others.

Geeks and even mild techies hooked on our YouTube age won’t be pleased with Wal-Mart’s offering. Customers won’t be able to burn their movies to DVD or play them on their iPods. That’s not so much Wal-Mart’s fault as that of the fearful movie studios.

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5 Responses to “Wal-Mart Goes into the Movie Download Business”

  1. on 06 Feb 2007 at 8:48 am 1.Kyle Austin said …

    Walmart today announced that they are officially jumping into the movie and television download business head first, and will launch their new site later today.

    This is an extremely crowded market and Walmart will compete against other movie download sites like CinemaNow, MovieLink, Amazon Unbox and iTunes. In addition to battling Netflix’s new service and an expected download entry from Blockbuster in the not so distant future.

    However, one major technology flaw for Walmart is the lack of a solid recommendation engine to discover the movies on the site.

    In 2005, Walmart was the scene of “RecommenderGate” when consumers looking for Planet of the Apes were directed to movies about Martin Luther King Jr. Expectedly this was found offensive to many and was all over the blogosphere. The end result was the whole recommender system being taken down and the loss of customer respect for the service.

  2. on 06 Feb 2007 at 10:53 am 2.Patrick said …

    The pages display fine for me on *spit* IE, but not on FireFox… If Walmart can’t find a web designer able to make a cross browser webpage, I’m available LOL.

    There is another service Vongo, that you may be interested in for watching movies. They don’t have all of the first run movies, but they have a decent selection. They also stream the Starz cable channel. I have had it for several months and enjoy it.

  3. on 06 Feb 2007 at 11:43 am 3.Matt said …

    your thumbnail isn’t clickable.

  4. on 06 Feb 2007 at 3:00 pm 4.Sean Hackbarth said …

    Matt, the thumbnail should now be clickable. Warning: it’s not a pretty sight.

  5. on 06 Feb 2007 at 7:40 pm 5.TAM Money and Finance » Wal-Mart Hates Firefox…for Now said …

    [...] What does Wal-Mart (WMT) have against Firefox? I showed earlier their new movie download service on the open-source browser looks like something produced by an IBM Selectric on LSD. It looks just as bad on Firefox on the Mac. (The comparison is better understood if you are on LSD as well or weed.) At first look I figured it was just a glich–a HUGE glich–with the Wal-Mart beta. But the retailer has had all day to fix it. Nothing’s happened. Michael Arrington quotes a web designer, “I could fix this in 30 seconds. Did they even test this in Firefox before launching?” [...]

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