The company responsible for 40% of DVD sales in the US just went digital but, at $20 bucks a pop is it really worth it?.A BETA version of Wal-Mart's new online video store is expected to debut today, and will initially will offer about 3,000 different movie titles and TV episodes to choose from. The new service will offer content from all the major studios and several of the TV networks, though ABC, CBS, and NBC are noticeably absent. New movie releases will be available for download on the same day they come out on DVD. The new titles will cost up to $19.88 USD, with older films to go for somewhere between $7.50 and $9.88 USD. It will offer TV episodes for $1.96 USD the day after they air. The participating TV networks include Fox, CW and Viacom's MTV, Nickelodeon, Comedy Central, Logo and VH1. Using the sheer power of its retail volume might, the prices that it will charge per movie will be about 4 cents cheaper on average than Apple's iTunes. Now, it's not quite enough change to "super-size" with mind you but, it's the first step in what will hopefully be a protracted pricing battle. However, the real competitive advantage it will have over iTunes, if the 4 cent savings hasn't sold you on the idea already, is that it will have a much larger selection of content to choose from/ The reason for this is that the iTunes movie library has been limited to offering content from a mere 2 studios, Disney and Paramount. The reason why Wal-Mart has been able to secure larger content distribution deals than Apple is because of the fact that it has agreed to offer variable pricing of movie selections, something Steve Jobs has been adamant in opposing. The movie studios have been demanding variable pricing mechanisms as a way to distinguish between new and old content, popular and unpopular. In an interesting reveal of how pricing numbers may change in the future, Kevin Swint, Wal-Mart's divisional merchandise manager for digital media, noted that although digital download and physical DVD prices are similar, "In the end, consumers will determine pricing." Our wallets and feet may just get a vote after all. Purchased movies will be protected by Windows Media DRM, and therefore can only be downloaded to a PC running Windows XP or Vista and to a variety of portable media players. They will not play on any Macintosh or Linux-based computers or iPods. Content can be backed up a maximum of 3 times, of which a burning to DVD option will be available by the end of the year (although the DVD won't play in an ordinary DVD player). Wal-Mart is optimistic that the new online movie download store won't cut into its sales of physical DVDs as they will each offer a different level of content. Download purchases will be "near DVDs" that don't contain bonus scenes, commentary, or whatever supplemental material offered on a physical DVD. "We think the disc business will remain quite healthy," says Kevin Swint, Wal-Mart's divisional merchandise manager for digital media. "But we know from our experience in music that digital delivery will come to complement the physical business. Customers have a growing interest in downloading video content, but complementary and supplemental to buying content on DVD." So what made the movie studios finally come around and let Wal-Mart be the first to offer such a large selection of movie content? One word - SALES. With Wal-Mart accounting for 40% of all US DVD sales, and DVDs accounting for about half of the total revenue that a movie makes, the studios recognize that Wal-Mart is the one company they must always placate. Wal-Mart is "the 800-pound gorilla in the room," Bernstein Research analyst Michael Nathanson wrote in December. "Most studios do not want to anger this giant." The success of the world's largest retailer's entry into the emerging digital download business remains to be seen but, it's effects on pricing, selection, and the nature of the business will certainly be profound. RELATED NEWS AND "HOW TO" GUIDES:Wal-Mart used The Pirate Bay to sell DVDsNetgear partners with BitTorrent Inc.Could BitTorrent Inc. be the new model for file-sharing legitimacy ...BitTorrent keeps going legit'; Azureus to offer BBC shows ...µTorrent sells out, gets bought by BitTorrent IncGrooveshark startup Plans to Pay Music PiratesBitTorrent torrent sites & search enginesAzureus - A Beginner's Guide to BitTorrent DownloadinguTorrent - A Beginner's guide to BitTorrent downloadingWatch The Simpsons, The Office, Jackass, South Park, Lost, X-Men, and More On-Demand For FreeSOULXTC: "walkin' the streets of P2P" |
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