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Summary:

Wal-Mart has muscled its way into the still-small online movie downloads market, after some experiments late last year with “Superman Return…

imageWal-Mart has muscled its way into the still-small online movie downloads market, after some experiments late last year with “Superman Returns” movie: it is launching a full-fledged movie download service with about 3,000 movies on offer, including including such hits as Disney’s Pirates of the Caribbean: Dead Man’s Chest, Paramount’s Mission: Impossible III, Sony’s The Da Vinci Code and Warner Bros.’ Superman Returns. It becomes the first traditional retailer to do so.
— Download prices will be $12.88 to $19.88 on the day of the DVD release; older movies will start at $7.50 and TV shows at $1.96 an episode.
— TV episodes will be $1.96 the day after they air. Networks on board include Fox, CW and Viacom’s MTV, Nickelodeon, Comedy Central, Logo and VH1.
— NOT from ABC, CBS or NBC, but it hopes to add soon.
Same restrictions as other PC-based services:
— Windows XP or Vista and Internet Explorer only, and to some portable devices using Microsoft DRM.
— The downloads can be backed up as many as three times, including to a DVD, but the backup DVD won’t play in a conventional DVD player.
AP: The retailer accounts for about 40 percent of DVD sales, and studios have been careful not to anger their largest customer.
— The biggest impact of Wal-Mart’s entry into the digital download business may be that it now frees studios to cut deals with other online services.
NYT: the company would create discounts that encouraged shoppers to purchase both DVDs and digital videos.
WSJ: The new Wal-Mart service is powered by the new H-P Video Merchant Service, which enables retailers to build sites that sell digital downloads of movies and TV shows online or sell DVDs for mail delivery. H-P is also currently building a facility that would manufacture DVDs on demand for retailers that will open sometime later this year.
Factors in Wal-Mart’s success , or the lack of it: Pricing is still too high. Non-compatibility with conventional DVD players etc. The site had a good thing doing with the Superman trial…what happened to the DVD+download bundling? Also, Wal-Mart’s threw in the towel for its online DVD rental service….why would online downloads be any better?
Related:
Wal-Mart Launches Movie Digital Download Bundle; More Coming
Apple and Wal-Mart In Talks Over Movie Download Revenue Share; Studios Wait Until Q4 End
Warner To Help Wal-Mart Launch Movie Download Site and DVD Burning Kiosks
Target, Disney in DVD truce; Controversy Over iTunes Movie Downloads Pricing
Major DVD-Seller Target Wants Level Playing Field From Studios: Report

  1. whoindatgarden Tuesday, February 6, 2007

    Well Wal-Mart had been in this distribution model albeit it was DVD burning on demand, that failed as there were no security policies in place and it took long to deliver and the pricing was similar.
    In this distribution model of downloads, as with others out there it is a placeholder and thats all it shall be.
    If Wal-Mart did 40% of DVD sales then to expect it to get even 1% of that through online Downloads would be a feat in the first 3 years.
    Wal-Mart's core customer is price sensitive, they are less likely to download a movie that costs the same or almost the same as getting it at the store. Also Ill say that the average person who shops at Wal-Mart is less likely to know how to download and burn a DVD than say an average customer who shops at Newegg.com or Bestbuy does.
    If this has to succeed for Wal-Mart, a value pricing model combined with a partnership to deliver cheap/lower priced broadband offering is necessary to woo the oh so savvy Wal -Mart shopper.
    That would be something that would propel others to lower prices on broadband connectivity and possibly make the video download delivery model succeed in the long run.

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