Wal-Mart is/isn't threatening studios over iTunes Movie Store

The New York Post came out hard yesterday with a piece about how Wal-Mart is threatening movie studios over the iTunes Movie Store, to which the retail giant quickly responded with a statement denying the claims. The NYP claims that Wal-Mart is telling studios that they'll start ordering fewer DVD movies if the studios jump aboard the iTMS bandwagon, similar to their temporary reaction when TV shows started being sold by Apple. Wal-Mart quickly disputed the claims, saying "While we recognize there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers." According to Reuters, a source "familiar with the situation" says that while Wal-Mart "freaked out" over TV show sales, the online sales haven't impacted their own, and they're not too concerned over iTunes movie sales. None of this really confirms or denies rumours of Wal-Mart prepping their own download store, but we're definitely not giving up hope of a price-slasher moving to the online space.

[Via Slashdot]

Read - New York Post (is)
Read - Reuters (isn't)

[Brian Marranzini @ Sep 23rd 2006 9:41PM]

Not that I want to take Walmarts Side on this, but Yes they will order fewer dvds if the movies are offered on I-Tunes or else whare simply because there will be less people buying them from walmart... Supply of DVD's is not really a factor in their price, (just look at how many AOL CDs must be made per year!) it is the number of consumers that are willing to purchase and that number goes down when they are buying them online.

[The Rev @ Sep 23rd 2006 10:04PM]

OMG burn Walmart.....1st you edit my music and now you throw a little 12 year old hissy fit

[Felcon @ Sep 23rd 2006 10:21PM]

Can't put it pass Wal-mart to do that. But then again movies but be pretty important to Wal-Mart and they have a right to protect their francis.

I have a blog at http://skybirdsat.wordpress.com if anyone of you guys have a few minutes please have a look and give me a few tips. :) Thanks.

[Ed T @ Sep 23rd 2006 10:37PM]

It's a federal crime to coerce another business to act in a manner that reduces competition, and that is why W-M is denying this story left and right. Apparently the deal the studios offered Apple allows ITMS to sell new titles at prices below what W-M pays wholesale. Their own download store is a screwed-up fiasco, and they are running scared. The W-M junior VP who make those threats had better pray there are no recordings...

[ScottytheMenace @ Sep 24th 2006 12:19AM]

Hey "The Rev":

"OMG burn Walmart..." is, in fact, a 12 year old hissy fit.

[Finished Law School @ Sep 24th 2006 1:12AM]

I never have and never will purchase media from Walmart so I do not care what sort of fit they throw nor do I care what they base it on.
There are other retailers I would rather support no matter if it costs me slightly more. And it is likely I will not need to deal with white trash when using these other retailers as well...

[balls @ Sep 24th 2006 1:53AM]

Even if Wal-Mart did boycott movie studios, so what?

People want movies. People don't want to shop at Wal-Mart.

Wal-Mart can stop ordering so many movies, other retailers will pick up the slack.

Wal-Mart doesn't carry Eminem albums, he's had no problem going multi-platinum.

It's the goods that people want, not where they go to get them.

Just like when Foot-Locker and Nike had and outs. Foot Locker wanted a better exclusive deal with Nike or it wouldn't prominently display their shoes. Nike responded by giving exclusive deals to other shoe stores.

Besides if the DRM appeases the MPAA, the costs savings associated with online distribution would definitely outweigh any potential short term losses due to Wal-Mart stopping sales.

[Michael @ Sep 24th 2006 7:42AM]

I totally agree with that. It's not like people will stop buying movies. In fact it will just be one less reason for people to shop at Walmart.

[Michael Neumann @ Sep 24th 2006 2:14AM]

Wal-Mart, lol. These corporations are so pathetic. I am so thankful that I have never spent a dime in a Wal-Mart. I went into one once and was so dismayed at what I saw that I have never gone back. Too bad some people only care about one thing and that is saving every single penny they can cause its those people that keep these people in business.

as to The Rev's comments, you bring the matches and ill bring the gasoline!! Smores anyone?

[Julian Bond @ Sep 24th 2006 3:08AM]

"but we're definitely not giving up hope of a price-slasher moving to the online space."

What are the chances of a legal western based AllOfMp3.com? A music download service that sells non-DRM, 192K VBR Mp3s at a price that seriously undercuts iTMS?

[David Gerard @ Sep 24th 2006 11:21AM]

"What are the chances of a legal western based AllOfMp3.com? A music download service that sells non-DRM, 192K VBR Mp3s at a price that seriously undercuts iTMS?"

The chances are 1.0. It's called emusic.com and I'm a very happy customer. The selection has really annoying gaps because they can't get the majors on board (no DRM), but I suspect that'll change as their popularity increases.

[Nick @ Sep 24th 2006 4:17AM]

WALMART SUCKS N E WAY. Who cares. No savy engadget reader would shop thier, regardless.

[Sean @ Sep 24th 2006 10:19AM]

I was wondering when someone would mention that. It's likely that the people shopping the iTunes store for movies either don't go to walmart very often, or have the spare money to buy a digital and a hard copy.

[Jhahne @ Sep 24th 2006 2:51PM]

Wal-mart is great for ammo, don't bash it.

[nimro @ Sep 24th 2006 3:43PM]

Learn to spell. It's "any way" not "n e way".

[LaSean @ Sep 24th 2006 9:32AM]

Wal-mart is totally and completely out of line for this, but don't be naive because you have the good sense not to shop in those dreadful stores. According to NPD, Wal-mart accounts for 37% of all DVDs sold in the US.

Wal-mart = 37%
Best Buy = 13%
Blockbuster = 6%
Costco, Target & Circuit City combine for 13%

http://www.findarticles.com/p/articles/mi_m0FNP/is_16_43/ai_n6161035

[JD @ Sep 25th 2006 11:49AM]

Thanks, LaSean, I was just looking for that stat. 37%! Walmart can pretty much do whatever it wants with these kinds of sales.
If Apple can't match these sales numbers, and Walmart threatens to stop selling Disney movies, believe me, Disney will drop iTunes fast.

And Walmart denying this? Bulls**t Walmart, this is the way you've always done business....http://www.fastcompany.com/magazine/77/walmart.html (an oldie but a goodie)

[Steve Jobs @ Sep 24th 2006 10:03AM]

37% of total DVDs? Hehe... Not for long....

[Blah @ Sep 24th 2006 11:59AM]

I wish walmart would die. Their stores just make me depressed, with all the grime and towering shelves and cheapo products. And the toothless mother beating her child in aisle three. I would muuuuuch rather pay a little more and escape all that crap. Come to think of it I would gnaw my own limbs off and drag myslef out with my teeth to escape all that crap.

[Tim @ Sep 24th 2006 12:41PM]

I'm not going to go to wal mart for a DVD, but I WOULD rather go to a store to buy a movie than download it to watch it on my iPod/PC/MAC. What about the quality of the video? A single layer DVD is 4.7 GB last time I checked, and most movies use dual layer discs [so 9-ish GB]. So even with a broadband connection, it would take a while to get a movie with a decent enough quality through iTMS. I'll take mine from a store, a non-WalMart store. A non-cheapo, non-white-trash, non-screaming baby store.

[rickm @ Sep 24th 2006 1:45PM]

Walmart will cater to the best interests of their clients. They've screened their content for a while, which their clients don't seem to mind. It's their right to carry or not carry content as much as it is your right to shop elsewhere.

[shaun @ Sep 24th 2006 7:36PM]

Other than the convenience of a 1 hour download, why would you spend more money to buy a lower quality movie from iTunes? Actually, I could drive to WalMart, dodge all the illegal aliens in the aisles, wait in line for 20 minutes, and drive back home with the dvd before the download was finished and still save money.

On the other hand, it warms my heart to see the three organizations I hate the most fighting like this.

So few movies are worth watching more than once so I'll keep using my Blockbuster Online service.

[Ronald @ Sep 24th 2006 11:19PM]

There are a lot of people that seem to be assuming that Wal-Mart's threat is empty. The idea seems to be if they reduce their buying of DVDs, peple will just go elsewhere.

But that's not at all the way it works. Wal-Mart has the foot traffic. A ton of the DVD purchases are by people who came to Wal-Mart, either to buy DVDs or to buy something else, but the main point was they came to W-M to shop.

There are a lot of things Wal-Mart can do to hurt a movie if it wants to single it out. The most blatant is that they don't stock it (they'll buy some, just not enough, so no one can call foul). Maybe some people will actuall shop somewhere else, but most will just pick another DVD and buy that instead. With new releases, people will go somewhere else if they do't find it, but for older movies, they usually won't. They're more interesting in finding something to watch tonight than they are in finding something specific to watch.

Their threats are very potent, and very real.

[Ronald @ Sep 24th 2006 11:20PM]

*people*
not peple

Sorry :)

[Pete @ Sep 25th 2006 11:29AM]

This is great for all non HD offerings, but once you throw HD-DVD or BD into the mix it's just not going to happen. iTMS is great for people who want a low res copy of a movie for the price of the real dvd disc. If you're looking for a HD copy of the movie then forget it. iTMS and most computers out there aren't up to the challenge.

I'll take HD-DVD or BD on my 52" HD set any day of the week compared to my 15" powerbook or my 19" LCD on my PC.

[tekdemon @ Sep 26th 2006 12:19PM]

err...the New York Post...
People should have to read the new york post before commenting lol.