Interview, Kevin Swint, Divisional Merchandise Manager, Digital Media, Wal-Mart.

Kevin Swint is Wal-Mart’s point person for digital media, responsible, among other things, for making sure the high-profile, multi-studio download service announced Tuesday will succeed in an increasingly crowded online marketplace. Apple’s iTunes movie department bowed with one studio — Disney — and 75 titles; Wal-Mart launched its beta with 3,000-plus titles from eight major studios, TV shows from Fox, CW, and 11 Fox and Viacom cable networks, and content from Warner Bros. and 20th Century Fox Classics. (NBC, CBS and ABC have yet to sign on even though their sibling studios have.)
Swint is proudest of the studio buy-in, which makes Wal-Mart the first download service to launch with all major Hollywood studios. But this is just a first step for the retail behemoth. “We’ve been working on this in a pretty intensive way for almost a year now,” says Swint. “I think all the studios understood quickly what we were trying to do.” He’ll judge success across the home video department; a download sale isn’t viewed as cannibalization.
The most important aspect for Wal-Mart:The way I suggest you think about it, or certainly the way we think about it, is we’re starting out today with what we believe is a very good shopping and discovery experience, we think that’s a step forward there. We’re bringing all of the studios to market; we think that’s very, very important and it was very important for us to do so at launch. … But, even more importantly than that, for us, this is a first step. Today, downloads is the focus of the site but this is all about, for us, evolving this business into a multi-channel, multi-format offering for our customers. You saw a glimpse of that with our Superman promotion back in November. We’re going to be doing more offerings like that going forward with digital offerings bundled with DVD. The site itself has our full DVD catalog represented today; we’re going to further integrate that so it’s an even better experience”
Manufacturing on demand: “We looking forward to working with HP on a concept you might describe as manufacturing on demand, whereby we can bring in some pretty niche-y. long-tail content and manufacture those in lots of one when the customer is ordering so we can bring content to market that is otherwise unmarketable.” Swint offers lots of examples — older content, indie content, “anything that doesn’t lend itself to a full replication run on DVD, which is a significant number even at today’s costs.” He also sees some time-to-market advantage with that flexible a supply change. Wal-Mart will continue to stock its current catalog in stores.
Competition: “In our customers’ eyes, competitive offerings would include iTunes and Amazon and perhaps AOL and a few others. … Over time, we think our unique stance here is going to be in a multi-format, across channel offering , as I’ve described.” Looking forward, says Swint, he expects a lot of experimentation at various retailers. “What that eneds up meaning, I don’t know. Certainly, anyone has a big presence in the DVD market is looking at us closely.”
Release windows: “The most important impact is that basically all of the major studios have committed to day-and-date release.” That means DVD and digital come out the same day. “That’s only happened in the last few months, really that all the studios have gotten into a position where they’re comfortable with that.”
Beta status: Why beta and how long? “This is a very new kind of offering to most consumers, a new technology and a new experience. We think a beta label helps them understand what to expect. And this is going to be a phase of rapid development and iteration on our service so we want them to know that things will be changing fairy constantly on our service.” Once they feel like they got something customers respond to well and it’s more settled, Swint says Wal-Mart will look at a hard launch “with a lot of marketing behind it.”
Portability; Wal-Mart is using PlaysForSure DRM so is limited to IE and PlaysForSure devices/PC for now. Swint: “We’re focusing on the device-space we can serve in the current market. We’d love to serve the PSP, we’d love to serve Zune, we’d love to serve the iPod. It’s not a questions of us desiring to limit it to Windows media by any stretch. It’s just that’s the addressable market. … I think there’s increasing willingness (for interoperability) … over time, most people, myself included, would see things being increasingly open over time. That’s the way these things tend to work. It’s just a question of the time frame.”