Rick Hanley

Movie Download Wars: Wal Mart Grasping at Straws

Rentals are more likely to be a mechanism for cannibalizing DVD sales revenue. A download for $20 is worth more that a physical DVD sale for $20. Much less overhead on the download.

When considering the whole impact of Wal-Mart, consider this: Wal-Mart also announced, but received rare coverage of, the availability of 60,000 titles for sale by mid-year. With Wal-Mart's pricing power, guess what that means to Netflix, Blockbuster, etc.

Red Herring
The Business of Technology
Wal-Mart Intros Movie Downloads
…Wal-Mart will use the foray into digital movies as a way to build a full-service online store aimed at home entertainment.

“We view this as the first step to move toward a multi-format and multi-channel strategy,” said Cameron Janes, director of digital media for Wal-Mart. “We are looking at leveraging the digital platform to support manufacturing on demand and offer a range of movie titles.” Those include independent films, foreign films, as well as hard-to-find titles.

Willem de Zoete, head of HP’s digital entertainment services business, said the company is building a business based on custom DVD distribution.

About 60,000 DVD titles will also become available through a mail-order service in which consumers have an option to go online and order the discs. The service will launch mid-year.

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