Target whines to major studios about online movie sales

If you can't beat 'em, complain about 'em. That seems to be the mantra of Wal-Mart, and now Target, both mega-retailers who seem to have given up the fight with video download retailers before it begins. The latter of the pair has come public with its objections to movie price schemes, calling them less expensive than DVDs, and busting out the vague threat that Target "would reconsider its investment in the DVD business" if the pricing didn't level out. Somehow, we can't quite muster much sympathy for the whiny retailer, given the fact that the online prices are hardly bargains, the resolution is lower, the special features are non-existent, and the market is still teensy tiny. Walt Disney Co. has apparently pointed most of this out to Target already, and since they've gone ahead with their open letter to the industry, we suppose it didn't do much good. Still, we've got a good feeling about market pressures pushing through full-blown online movie sales at decent prices within, oh, let's say the next decade or two, no matter how much "investment reconsidering" Target does in the meantime.

[Joe A. @ Oct 9th 2006 6:44PM]

I don't see the point of Target and their PR department doing this. Why are they worried when there's nothing to worry about? Plenty of people still go to Target to get great DVDs for great prices yet Target still whines about this?!

Talk about attention whoring. But, this is not exactly the best marketing move because all this does is give movie downloads from iTunes more attention because people will wonder what the big deal is.

[Chris @ Oct 9th 2006 6:46PM]

I don't really see how this is much of an issue. The actual price of manufacturing DVDs is pure profit anyway, I don't really see how the possibility of a spike in lower sales could really convince them to stop DVD support. Most people would rather have a hard copy anyway and be able to play it on a TV (without much hassle) and lend it out to a friend. Not to mention special features like commentaries and such that could not be available with a lo-res download.

[Gr1zz @ Oct 9th 2006 6:50PM]

Its called compitetion, target and wallmart of all people should know how the game is played.

Consumers complain of high prices and torrent, studios complain of torrents and lower prices, retailers complain of lower prices and complain to the consumers????

[jlh @ Oct 9th 2006 6:52PM]

So both Target and Walmart are throwing hissy fits over digital distribution, they can whine all they want and there is nothing they can do about it. There is no way they will drop dvds from there store shelves because people still buy dvds (lots of dvds) so in reality it's all just a lot of talk. If the studios were smart they'd all band together and collectively turn a deaf ear to both of them.

[daschupa @ Oct 9th 2006 6:52PM]

Man I guess target should stop selling dvd's and show a distinct hit in the profit margin. That'd show Hollywood.

[Javaflash @ Oct 9th 2006 7:02PM]

They just think 2 years down the road when household bandwidth expands, download wait time shortens, digital backup permitted (DVD-R backup from legal download files).

On the retail end (WalMart, Target, not the movie studio), DVD sales don't generate decent banks. Many stores are willing to shelve them only because new releases drive store traffic. AND they will do anything to defend that.

[Zorque @ Oct 9th 2006 7:03PM]

I think Target's bluffing. How much money would they lose from not selling DVDs and other digital video? How many people would still shop there if they stopped carrying digital video altogether? And over what, maybe a million dollars in sales they won't get? In the long run that means nothing.

[apeguero @ Oct 9th 2006 7:37PM]

Last time I was at a Target store all I saw were old movies and kid movies. Target doesn't carry movies worth going there for. I buy my DVDs from either BJ's or Circuit City, the latter which usualy has the better prices on new releases anyways!

[Paul @ Oct 9th 2006 7:47PM]

I think everyone is missing the point - they're not whining about digital distribution, they're whining about cost. I think we could all stand to have DVD's drop in price a few bucks - Target and Wal-Mart are saying that their cost is more than the retail at the Apple store.

Yeh yeh I know there is less physical product with a digital download; but companies still need to make a profit.

[Geoffrey Sperl @ Oct 9th 2006 7:52PM]

Javaflash hit it on the nose: DVDs drive foot traffic into the store - well into the store. Target is simply trying to protect that. Hell, if you have kids have you seen what you have to get through for the toy section there? The stores are laid-out like that for a reason.

You all also have to keep in mind who Target's 'target' consumer is: Joe or Jane Customer. It's not people like us - 50" DLP HDTV with an upconverting DVD player and HD service to watch their Cinemax pr0n bigger and better - it's people who still have standard def TVs that Apple has made portable music so much easier for. That's the auddience Target doesn't want to lose. So if they can offer "American Pie" for $3.99 on an endcap in the impulse areas, they want to do it.


Oh, and sorry, apeguero, I have to disagree with you about Target's selection. No, it's not expansive, but when the restored version of "Gojira" (the original Japanese "Godzilla" without Raymond Burr, though that version is on this package's second disc) came out, none of the 'serious' DVD stores in the area (Best Buy, Circuit City, etc.) had it... but Target did and it was less than $15. So, yes, I bought it from Target.

[Michael @ Oct 9th 2006 9:33PM]

I've seen alot of DVD on sale at Target and Walmart for about $5 -$7.50. I haven't found any that cheap online. Not to mention the DVD's are better in almost every way. What are they really complaining about?

[Bloobie @ Oct 9th 2006 10:35PM]

What you fail to realize is the amount of clout that both Wal-Mart and Target have over the movie studios. Wal-Mart alone sells 40% of all new DVDs released. Target accounts for 15% of sales. When a retailer that sells 40% of your product asks or tells you something, you are going to sit and listen. Movie studio CEOs have been known to visit Wal-Mart's headquarters for meetings to discuss big DVD releases.

[Dispraiser @ Oct 9th 2006 10:57PM]

Somebody call the wwwaaaahhhhmbulance! And to think I went through training with these guys then quit for another job.

[threadkiller @ Oct 10th 2006 12:42AM]

Isn't this the exact reason there are rules against monopolies? Shouldn't Walmart or Target be fined for anti-trust offences or be split apart already? They are using their size and clout to hurt consumer choice and bolster their bottom lines.

[Craig @ Oct 10th 2006 1:27PM]

This is word for word from techdirt...and they had it first...comon engadget!

[ResidentAsylum @ Nov 2nd 2006 9:46AM]

I've worked for Target for 13 yrs. and just heard about this today. We had to run around the store and remove all graphics having to do with Disney. I don't believe this is the end of the issue with Target.

I see this as more a game of chess. Disney made their move with announcing online DVD downloading. Talks between Disney and Target accomplished nothing. I can understand both sides of the issue here. Target countered with a move as bold as to eliminate merchandising new movies along heavy-traffic aisles, and the removal of all Disney signing throughout the store. I surmise that Target will be ordering considerably smaller quantities of the new release DVDs. Now Target waits for Disneys next move.