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Wal-Mart Offers Up Downloadable Movies
An anonymous reader slipped us the link to a C|Net article on another downloadable movie offering, this time from retail giant Wal-mart. Stinging from their loss to Netflix in the online DVD rental business two years ago, they are coming out swinging with this service. They've made arrangements with all six major Hollywood studios, and (the article theorizes) will likely have highly competitive prices. With Apple's dominance of this particular market, there is still no guarantee whether Wal-mart will have any success with this program. The biggest problem, commentators note, is that there is no guarantee Wal-mart's service will draw customers into their stores: the issue that ultimately caused them to scuttle the DVD rental service. What do you think of a major retailer getting into movie download business? Will the company be able to outmaneuver Apple and Netflix the same way it has done with other retailers in the past?
Not if Wal-Mart takes the same attitude with online movie downloads as they do with their stores.
Wal-Mart has always been about one thing and one thing only: Dirt cheap stuff. They might as well make it their slogan: "Wal-Mart, where you get Dirt Cheap Stuff(TM)." You can see this attitude in their stores with cluttered aisles, severe lack of cashiers, poor treatment of employees, etc. People have unfortunately been willing to put with this this because, well, they want dirt cheap stuff.
The online movie download business isn't about dirt cheap, it's about customer service. The people who use it aren't poor; they're at least middle-incomers with computers and high-speed access to the Internet. If Wal-Mart tries to go dirt cheap on this service, they're going to get eaten alive in this space.
I don't think that Walmart has a chance - Netflix and Blockbuster have the long tail. If WalMart is banking on only the 'major studios' they're missing the point - selection, selection, selection.
But how Wal-Mart treats employees can and does affect the tax payer. Case in point, Wal Mart got into a lot of trouble over stating that many of their workers in Maryland would be better off on the state's(tax payer funded) insurance than on Wal-Marts(Walton funded) insurance. Another even more reckless point is that Wal-Mart stated that inclimate weather is no longer an excuse for being late for work. How many white collar employees that weren't in critical(and thus usually better compensated compared to their peers) roles would accept this? It also puts everyone else in danger. While obviously there are exceptions, I would wager that more often than not Wal Mart employees tend to drive less reliable cars that are less likely to have snow tires and they are less likely to have (good) car insurance. So what happens if they are rushing to work after dropping the kids off in bad weather and they wreck because they were trying to satisfy Wal Mart's unreasonable demands. They may cause loss of life to themselves or others, they are more likely to cause significant property damage that they cannot pay to recompensate, traffic may get snarled, the police may have to spend money getting them out of there. Everyone BUT Wal-Mart loses, and yet it is Wal-Marts policy. They would rather see this happen than give someone an hour or two of overtime while they are covering a shift for someone who cannot make it into work. That is how Wal-Mart's policies towards employees hurt everyone.
Monstar L
What's the advantage of most things they pump at us? I'm waiting till the studios figure out that they could pack boxsets on fewer discs using blueray/HD instead of just upsampling and wasting space. Nothing ruins the fun of watching a series than having to change DVDs every couple episodes (though maybe the getting up and changing the disc bit is how they force us to remain so uber physically active?)
Tom
Someday, I'll have a real sig.
Poor people shop at Wal Mart because they have to. The stores suck, the employees suck, everything sucks about Wal Mart.
One thing they are missing is that very few basic broadband packages offer enough download size per month to allow stuff like this to take off. Most ISP's offer 5GB-10GB a month for their basic packages, which isn't nearly enough for Wal Mart to make money off of anything.
Wal Marters will try this for a month, then get utterly shafted on usage fees then forget about it. The rest of us already have other venues to get movies.
Wal Mart would have to price this at $1.99 to get any movement, they won't price it at that level; any level they do price it at will suck and no one will care.
Wal*Mart is unlikely to make this work, because (whatever you think of them) their excellences are not in innovative use of technology. What they are good at is business deals that look good to their suppliers but turn out to benefit Wal*Mart in the long run... and in ratcheting down their suppliers' prices.
How is Wal*Mart going to make their downloadable movies so much cheaper than the competition that they'll be able to drive the competition out of business? Force their IT department to outsource their movie download servers overseas?
And on the Internet everything is nearby. When a brick-and-mortar Wal*Mart succeeds in killing off the local small-town businesses, the local residents are faced with the choice of shopping at the local Wal*Mart or driving a long distance. On the Internet, even supposing that (say) Wal*Mart drives Amazon UnBox out of business, you're not going to have to drive ten miles to shop at the iTunes store.
The only way I can see Wal*Mart winning is if they use their famous muscle to pressure the MPAA into allowing their products to being delivered without DRM, and with the capability of burning a DVD. At the moment, the Wal*Mart video download website seems to be showing me such badly scrambled pages that I can't read how it works, but I don't think that's the way it works now.
"How to Do Nothing," kids activities, back in print!
Do you have children? Have you ever tried to take them to day care and/or school an hour, or even half an hour, early?
Have you been touched by his noodly appendage?
Most Wal-Mart store employees are not white collar employees, so comparing them to what white collar employees may or may not expect isn't a fair comparison. Most blue collar employees are expected to be at their jobs at a certain time or they get docked pay, that's way it is, if you don't like it, find a job you can make it to on time or better yourself and move into a white collar job, where the expectations MAY be less.
As for the weather making them late, maybe they should plan better. I have never had snow tires (even though I could easily afford them) on my car, and I'm not involved in accidents or late for work when it snows, because I plan ahead and leave earlier. BTW, most of the accidents I see in the snow are caused by idiot SUV drivers that think they are invincible in the snow, but forget that ultimately you have to stop that beast. I would be surprised if a majority of Wal-Mart employees are driving $30K+ SUVs.
I've always thought the studios were braindead. I think most people would buy 2 or 3 CDs a week if they only cost $5. Instead, they make them cost around $15, so I'm lucky if I buy 1 a month. Most CDs aren't worth that much. It's even worse with downloads. Why would you pay $11 for the downloaded album, when you can get the CD for $15? iTunes don't really cost anything to distribute, so they should make it smart, and charge $.25 for a song. Absolutely nobody would pirate music because it just wouldn't be worth their time. People would be buying them like hotcakes, and the studios would be making even more money. But instead they inflate the price to the highest number they think anybody would pay, and make very few sales compared to the number of people who actually would like to have a copy of the song.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
That's pretty much the crux of economics. Different people are willing to pay different amounts. You can shout till you're blue in the face how you'd buy more if it only cost less, but it won't make much difference. If they lowered the prices on DVDs and CDs then they would certainly gain more customers. Doubling their customer base doesn't help any though if it means cutting margins by any more than 1/2. CDs and DVDs are both massively profitable items. I imagine that the prices are very carefully calculated to yield the maximum amount of profit (feel free to correct me if anyone has statistics to prove otherwise).
In contrast though, I would say that downloadable videos and songs are nowhere near their ideal price. The biggest problem is all this DRM and poor quality drastically reduces their worth to consumers. As an alternative to current options, they're abysmal. Take a look at Walmart's store here. I haven't seen many details, but it's pretty safe to assume that these will not be burnable to DVD, will not play on anything other than the PC they're downloaded on, will likely be fairly heavily compressed, and will be DRM'd to hell. Given even one of those conditions is true, why the hell would I pay the exact same price as a DVD for one of these downloads? At least iTunes gives me some break on the price. This store will be dead in the water from the first minute and we'll just here more croaking from the **AA execs about how they can't compete with illegal downloading.