Wal-Mart: we’re not fighting iTunes Store movie downloads

“Wal-Mart Stores Inc. disputed a report on Friday saying it was trying to dissuade movie studios from working with other forms of distribution, such as Apple Computer Inc.’s iTunes,” Gina Keating reports for Reuters.

“The New York Post reported that the world’s largest retailer had warned Hollywood it may retaliate against studios for selling movies on iTunes amid concerns that Wal-Mart’s DVD sales will suffer,” Keating reports.

Keating reports, “Wal-Mart disputed the Post report and said it was not pressuring movie studios into shunning online delivery. ‘Customers want to watch movies and they want to be able to make the choice when and how they want to view them,’ a Wal-Mart spokeswoman said. ‘While we recognize there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers.'”

“Apple and Disney announced plans this month to sell movie downloads on iTunes. Disney Chief Executive Robert Iger said on Tuesday the company sold 125,000 downloads, worth $1 million in revenue, from iTunes in the offering’s first week,” Keating reports.

“A source familiar with the situation said while big retailers like Wal-Mart ‘freaked out’ earlier in the year when Disney and other studios began selling TV shows on iTunes and other Web-based platforms, they showed no particular concern when Disney became the first studio to offer movies on iTunes,” Keating reports. “The source, who declined to be identified, said the discount retailer learned over the intervening months that customers who download — primarily young, single males — are not the same as those customers who buy DVDs.”

Full article here.
If Hollywood has the green light as far as Wal-Mart is concerned, then we hope to see Apple’s announcements of additional iTunes Store feature-length content from non-Disney studios as soon as possible.

Related articles:
Wal-Mart threatens retaliation against Hollywood studios if they sell movies via Apple’s iTunes – September 22, 2006
Wal-Mart not happy with looming threat of Apple iTunes movie downloads – August 31, 2006
Wal-Mart loses ‘philosophical argument’ with Apple CEO Steve Jobs, gains top-selling iPod – November 29, 2005

50 Comments

  1. So…
    Was this part of the article true?

    Wal-Mart, worried that offering the shows for viewing on iPods would cut into DVD sales at its stores, sent ‘cases and cases’ of DVDs back to Disney,

    Sounds rather monopolistic to me and rather damning.

    What is the truth?

  2. “The source, who declined to be identified, said the discount retailer learned over the intervening months that customers who download — primarily young, single males — are not the same as those customers who buy DVDs.”

    The demographic that is techincal enough and wealthy enough to download movies online certainly isn’t a large portion of Walmarts target market anyway.

    In fact downloading movies online is actually a loss leader and will drive more traffic to the easier (and cheaper) physical DVD sales.

    Those hard core enough to not pay at all are still going to pirate bay regardless of what iTunes or Walmart does.

    I for one have given up on iTunes and downloading of TV shows and movies because of the bloated iTunes 7 prematurely hobbling expensive hardware.

    I’m well equipted with iPods and have a extensive music collection which, if iTunes 6 starts to refuse music downloads, I can revert to traditional methods such as Walmart cd purchases. I can also pickup my DVD’s there as well.

    Walmart wins in the end anyway. Unless some sort of new compression standard arrives that will reduce the download movie files to the size of music files.

    Somehow I don’t think that’s going to happen.

  3. I wonder how the nutters feel now. You “Wal-Mart” is evil folks are really wacked out. Give us Mac users a bad name. Are you also part ofthe Bush=Hitler crowd? Sounds like it from posts in the last two threads. Yuk.

    Was it the dramatic backround music on the Wal-Mart movie trailer that did it for you?

  4. damn! a whole page of mindless rants about Wal-Mart for nothing! Come on, MDN, whip out something else from the tabloids – we’re bored now… how about ‘Bush tries to kill Brad and Angelina’s baby’, or maybe ‘Wal-Mart makes secret deal with illegal space aliens to harass gays’. You can do it! What’s in today’s Post? Or Times, for that matter? My torch and pitchfork stand at the ready!

  5. It’s all about control. Hollywood would prefer to keep control over their content. DVDs allow them to do that. Walmart as a big reseller obviously has some clout, but they do need to be wary of monopolistic behavior.

    People are learning to rip DVDs like CDs 7 years back. Is Hollywood going to start losing sales like the record industry before them? Is digital DLs the way to go for them? Other movie services have Hollywood on board. I wonder what the kickbacks are for those? And how does Apple’s model differ?

    Is it just that no one like Apple’s success? Seems to me that they would rather deal with a large number of small services because Hollywood can dictate the price better.

    Success will rather depend on whether Apple’s offering is better in quality and usability. In reality only 30 songs have been bought from iTMS per iPod. Collectively that’s a lot of revenue, but considering that each iPod holds an average of 1000 songs, it suggests that most people prefer ripping their own music.

    I for one am in that boat and will be unlikely to buy that many songs or movies from iTS in the near term.

  6. A very crafty “non-denial denial.

    Story is “disputed,” not denied.

    Wal-Mart “not shunning online delivery” — obviously, since they’re planning to do it themselves.

    Not dissuading from using “other providers” — such as Amazon, Napster, other alsorans.

    Charge that iTunes is being specifically targeted is never denied or disputed by the story — only that they’re not trying to block downloads generically.

    Nothing in this Reuters story convinced me that the Post got it wrong.

  7. Everybody,

    It is so obvious that Wal-Mart is lying here, just like they LIED to the public about not using sweatshops in China. And then, after they were CAUGHT for using sweatshops in China, they CONTINUED to do so after they told the public they weren’t doing so anymore.

    Also, as calpundit stated above, note that they are not DENYING the report, they are DISPUTING the report.

    Folks, everyone please rush out and rent the incredible eye-opening documentary called:

    Wal-Mart: The High Cost of Low Price
    http://www.walmartmovie.com

    That movie shows how absolutely EVIL Wal-Mart really is, in every way imaginable. Ways that you can’t even begin to imagine right now.

    I’m proud to say that i have NEVER stepped foot inside of a Wal-Mart, and if any of you have in the past, you will never want to step foot inside of a Wal-Mart again after seeing that documentary.

    Wal-Mart: The High Cost of Low Price
    http://www.walmartmovie.com

  8. “In fact downloading movies online is actually a loss leader and will drive more traffic to the easier (and cheaper) physical DVD sales”

    Can you elaborate on this…

    Certainly.

    Walmart might be taking at first what they perceive as a loss of DVD sales, but eventually the constraints of iTunes, and everything associated with downloading large amounts of copy protected, non-DVD player usable, no potential resale value, hard drive space using media will catch up to the user.

    Sure the typical online demographic, young single male, might not see a problem with iTunes downloads, thinking only about themselves and their symbolic relationship with their computer. But DVD movie watching and owning is a social event categorized by group behavior, trading and interacting. People use DVD’s as a method to initiate human interaction and contact.

    This is where a more universal, cheaper (in terms of hardware needed, just a simple DVD device) portable media format reigns. Plus the avenue of recuperating one’s investment in a sizable iTunes video collection is not nearly as easy (or even possible really due to lack of packaging) as DVD movies are.

    Statistically speaking, with the average iPod owner only downloading less than 185 songs per unit sold from iTunes, combined with the fact that movies sales pale in comparison to music due to it’s higher per unit cost, leads credence to the possibility that iTunes movies sales won’t be all that fantastic. The demographic is very small and piracy is still the cheapest alternative.

    Certainly hardware hobbling bloated iTunes updates doesn’t help those who wish to participate legally.

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