The world’s largest retailer will enter new territories as it launches its greatly anticipated online movie download store.
The online video store will make its long-awaited debut on Thursday. The initial “beta” version will sell digital versions of about 3,000 films and television episodes from all the major studios and some TV networks, including Fox Broadcasting.
Wal-Mart will not offer content from ABC, CBS or NBC from the very beginning of its project, however the company said it hopes to add shows from those networks.
Wal-Mart, as the nation’s largest retailer, is using its buying power to outdo other download services, by charging lower prices. The company will offer films from $12.88 to $19.88 and individual TV episodes for $1.96 - 4 cents less than Apple Inc.’s iTunes store.
This might well have an effect on customers, who are sure to appreciate a decrease in pricing.
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. There is a downside though, as 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, so this is an advantage to the latter.
Also, Wal-Mart’s online store will sell older titles starting at $7.50, a much more attractive offer compared with the $9.99 charged by iTunes.
Wal-Mart will launch its online store with films from all major studios. This is largely in part because Wal-Mart assures about 40 per cent of DVD sales, being film studios’ largest customer. Why stop something good when it’s good?
Analysts consider Wal-Mart’s importance was a significant reason for studios to agree to sell films on the retailer’s new site. And now the company will set on its competition with established sites such as Amazon.com, CinemaNow and iTunes.
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 - the company said it hopes to offer the option by the end of the year.
Wal-Mart has also expressed its acknowledgement of the fact that DVDs still rule over downloading video content.
“Customers have a growing interest in downloading video content, but complementary and supplemental to buying content on DVD,” Kevin Swint, Wal-Mart’s divisional manager for digital media, told The Associated Press.
“With the health of the DVD business and coming high-definition formats, that business will remain quite strong for quite a long time.”
Internet downloading is expected to generate about $4 billion in annual revenue in five years, compared with an estimated $27 billion from DVD rentals and sales, according to Adams Media Research.