Wal-Mart excludes Mac and iPod users with new low-res TV show, movie download store

“Wal-Mart Stores may have lost the online DVD rental battle, but it has no plans to lose the higher-stakes video downloading war,” Michael Barbaro reports for The New York Times.

“Wal-Mart’s video download site will offer movies and television shows. The new service enters a field already crowded with competitors,” Barbaro reports. “Today the company will introduce a partnership with all of the six major Hollywood studios — Walt Disney, Warner Brothers, Paramount, Sony, 20th Century Fox and Universal — to sell digital movies and television shows on its Web site (http://www.walmart.com/videodownloads), becoming the first traditional retailer to do so.”

“The move plunges Wal-Mart into competition with several established sites, like Amazon.com, CinemaNow and iTunes, and given the chain’s penchant for price cutting, could drive down the cost of a digital download,” Barbaro reports.

“But supremacy in the digital movie business could prove elusive for Wal-Mart, a company that is used to being the No. 1 seller of everything from DVDs to diamonds,” Barbaro reports. “Apple already dominates the online music and movie industry, leaving a sliver for everyone else to fight over. And Wal-Mart has already stumbled once before with online video rentals, shutting down its DVD rental business two years ago and referring users to its rival Netflix instead.”

“‘As much of an 800-pound gorilla as they are in retail sales, they are an 80-pound weakling when it comes to digital distribution,’ said Michael Goodman, digital entertainment program manager at the Yankee Group, a consulting firm,” Barbaro reports.

Barbaro reports, “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… To avoid running afoul of studios, who want to protect their DVD business, Wal-Mart said the price of a digital movie would be comparable to that of the DVD at its stores.”

“Bill Dreher, an analyst at Deutsche Bank Securities, said… he did not expect sales from the digital video service to ‘become more than a freckle’ on the chain’s earnings.”

Full article here.

Gary Gentile reports for The Associated Press, “Apple charges less for some films sold on iTunes — $12.99 when pre-ordered and during the first week of sale, or $14.99 afterward. But it only carries films from two studios, The Walt Disney Co. and Viacom Inc.’s Paramount Studios. Most studios have resisted signing deals with iTunes in part because of Apple’s desire to sell movies at one price. Studios prefer variable pricing such as Wal-Mart is offering.”

“Apple’s pricing has also caused scuffles between studios and major retailers, including Wal-Mart and Target Corp. The retailers don’t want studios to sell digital copies of films cheaper than the wholesale price of physical DVDs,” Gentile reports.

Gentile reports, “Wal-Mart will not rent films online. The films can be played on a PC or transferred to Microsoft Windows Media-compatible portable digital players. The movies will not play on Apple computers or the popular iPod. Movies bought from the Wal-Mart store also can’t be burned onto a DVD, although the company said it hopes to offer the option by the end of the year.”

Full article here.

According to Wal-Mart’s press release, the beta service is powered by technology from “HP Video Merchant Services. From Wal-Mart’s FAQ: We currently support Microsoft Windows XP and Microsoft Vista (32 bit only, no Macintosh or Linux). Due to licensing restrictions portable files will not play on Apple iPod, Sony PSP, or Microsoft Zune portable players. Technical specs for TV Shows video: 320 x 240 resolution, 30 fps, 500-810 kbps bit rate.
This is excellent news! Stay tuned for news from Apple now that the studios are now free to deal without threats from the likes of Wal-Mart. This low-res Wal-Mart thing is the same Mac- and iPod-incompatible piffle as Amazon’s Unbox and it will be about as successful. Apple’s iTunes Store offers 640 x 480, 30 fps video quality, 1.5 Mbit/s video bit rate with 128 kbit/s audio. And, only Apple’s iTunes Store is compatible with Mac, Windows, iPod, Apple TV, and, soon, iPhone.

Related articles:
Disney film sales via Apple’s iTunes Store rise sharply; over 1.3 million sold in first three months – February 02, 2007
Apple adds Paramount films to iTunes Store – January 09, 2007
Disney sells nearly 500,000 movies via Apple’s iTunes Store in less than two months – November 09, 2006
Fox movies, including ‘Star Wars’ franchise, coming soon to Apple’s iTunes Store? – November 08, 2006
Analyst: two major studios seen joining Apple’s iTunes Store – October 10, 2006
Report: Apple and Wal-Mart in discussions over iTunes Store alliance – September 29, 2006
Disney’s remarkable 1st week iTunes movies sales should have studios clambering aboard Apple train – September 20, 2006
Disney sells 125,000 movie downloads via Apple’s iTunes Store in first week – September 19, 2006
Apple debuts iTunes 7 – September 12, 2006

Wal-Mart video downloads are Windows-only, iPod-incompatible – November 28, 2006
Wal-Mart threatens retaliation against Hollywood studios if they sell movies via Apple’s iTunes – September 22, 2006
Fortune: Amazon Unbox movie service ‘unfun,’ a horror show, two thumbs down – September 19, 2006
Analyst: ‘Amazon Unbox – Well that didn’t work at all’ – September 09, 2006

48 Comments

  1. “Stay tuned for news from Apple now that the studios are now free to deal without threats from the likes of Wal-Mart.” Exactly. A major excuse used by the studios to hesitate partnering with iTunes has now been removed. Unless Wal-Mart still complains to them about it. Which they very well could.

  2. I gonna take this as good news, or else Disney would not be in the picture.

    Once the studios other than Disney and Paramount see that they are not making much from these services compared to iTunes, the dam will burst.

    And then later in an unrelated story…shuffles preloaded with music libraries!!!?

  3. That’s it. I am going to return all my cheap useless tools, cheap ratty clothes, and other assorted cheap, flimsy goods back to Wal-Mart. I’ve had enough.

    (I wonder if it matteers if I bought them there?)

  4. Unlike MS’s Zune negotiations with Universal, with little negotiating strength, this case is WM. They’ve undermined Apple’s position because they’ve relented to higher and variable pricing, comparable to DVDs, and they’ve reverted to lower quality QVGA. Sh*t, that’s not even near-DVD quality. This will make it harder for Apple to negotiate with other studios, until WM has been shown to fail.

  5. don’t people at these companies realize that angering mac people with incompatibility is bad for business?

    apple customers typically buy 30% more software and content than the PC consumer, and expect their purchases to work with their devices. and by not allowing these films on iPods? WTF!? 100million iPods that cant play these movies? nobody ever learns.

  6. hmmmmm, 320×240 in WM format.hmmm i is betting that when the next version of iTunes comes out the content will be 720p for appleTV, and that we will learn magically that the TV device will up convert current iTunes video content to HD so it will look georgeous on the big flat screen.

    and then after a month of this service not working like amazons unbox, all of the studios will jump in with steve, if they aren’t going to already.

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