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.
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.