“Today’s New York Times combines two interesting news stories about movie downloads into one. First, it describes Wal-Mart’s (WMT) plans to provide digital movie downloads for an add-on fee to DVD sales, beginning first with Superman Returns this week. Then, it contrasts this effort with the news that BitTorrent is striking deals with studios to offer their movies using its peer-to-peer (P2P for short) technology. The article gives the impression that one of those two deals should really get movie downloads going,” Carl Howe or Blackfriars’ Communications writes for SeekingAlpha. “My view: both efforts are not going to get significant traction. They both have fatal flaws.”

Howe explains why he thinks that “Wal-Mart’s plan is just a silly offer, and my prediction is that it will suffer a quick and well-deserved death due to lack of consumer interest” and says. “The BitTorrent deal is similarly flawed, but for a more traditional reason: they haven’t thought out the user experience properly.”

Howe writes, “There’s a really nice package that does all this: it’s called iTunes. I predict it will simply grow encrypted peer-to-peer downloading capabilities. This fits perfectly into what we already know about Apple’s media plans. Apple is already rumored to be building a peer-to-peer protocol into Leopard. We also know Apple is very interested in moving around very large high-definition files to use with its iTV box. And it fits the criteria defined above nicely because:”

1. iTunes already has 200 million users
2. iTunes has proven its usability
3. Apple dominates music and video players
4. Financial accountability is already in place

Howe writes, “If Apple integrates peer-to-peer sharing into iTunes AND provides studios a revenue stream for the sharing of movies, it has the potential to dominate the digital movie business in the same way it has dominated digital music.”

Full article here.

[Thanks to MacDailyNews Reader "Macaday!" for the heads up.]

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Wal-Mart video downloads are Windows-only, iPod-incompatible – November 28, 2006