updated 10:05 am EST, Tue February 6, 2007
Wal-Mart Video Store
Wal-Mart today revealed its new Video Downloads store, representing not only the company's first video download service but also the first such service by a physical retailer. The retail giant also shocked many today by announcing that it had successfully negotiated licenses with the six major American studios -- including Apple's close iTunes partner Disney -- giving it the largest catalog of any online video service. An estimated 3,000 movies and TV shows will be available on launch, compared to the 600 of the iTunes Store.
Read through for pricing and further details.
Crucially, the company said that it would keep its prices in line with its DVD catalog, attempting to protect its dominance of DVD sales. Costs will vary depending on launch dates and the profile of the release: new releases sell for between $12.88 and $19.88, while older movies will sell for $7.50. TV shows will sell for $1.96 per episode.
Downloaded videos will also tie into Wal-Mart's other device sales. Although no shows can be written to movie DVDs, a relatively uncommon download system will give buyers both standard-ratio 480p movies as well as half-size versions for portable players. Not all content will have the option, the company warned; however, sales at the website will tie into DVD releases, offering discounts to those who buy both purely digital and physical copies of the same movie.
The move by Wal-Mart has already raised concerns from experts, according to the New York Times. While the sheer volume of releases may help the relative newcomer defeat market leader Apple, Wal-Mart has generally had poor results challenging digital downloads in the past, floundering in both its music downloads and online DVD rental service.
"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 the Yankee Group's entertainment program manager Michael Goodman.
Analysts suggest that Wal-Mart will need to drive online customers to its shops to be successful, as the chain routinely shelves features of its website that fail to improve its core retail business. DVD rentals were an example of this, Goodman said.