When Wal-Mart looks out at the digital landscape, it sees opportunity, if not success. The retailer behemoth tried its hand at the online music gig, but came up mostly empty. Now the company wants to try again, this time with video.
Online video sales are nothing new, and no, I’m not referencing porn. Both Movielink and CinemaNow have been around for years, with the latter being started way back in 1999. Yet it has really only been a year or so that video has become the Next Big Thing™ online, and whether you want to attribute that to the iPod, YouTube, or a 100 kiloton hype bomb, that’s up to you. Now that Apple is selling movies, we can expect the competition to hurry itself to the starting line.
Wal-Mart strikes fear into the hearts of many. Both Money and the Financial Times, which are carrying the rumor, make much of the fact that Wal-Mart is the world’s largest DVD retailer, accounting for more than 40% of sales in the US alone. What neither story reports, however, is this very important fact: Wal-Mart is also the world’s largest music retailer. How did that work out for their music store? Not well. Despite the fact that Wal-Mart carries its tradition of loss leading into the online world by selling songs for $0.11 cents cheaper than Apple, Wal-Mart languishes with less than a couple of percentage points of market share. Wal-Mart, like all brick and mortar music retailers, has lost market share to Apple.
Indeed, the Financial Times really dropped the ball on this, because their rumor mill grist turns on a Wal-Mart job posting for a business manager of digital video. The job includes this task: “defining pricing strategies to maximise market share.” That worked out great in the music department!
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I bet THIS will flop also….