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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.
Walmart will also be selling TV series. They have more studios signed up than Apple, mainly due, I think, to Walmart's caving in to the Studios demands (same pricing as DVDs).
Rubies and Pearls are not what you think.
because if you aren't you sure do imitate one.
I get so tired about hearing how wal-mart supposedly abuses their employees. Look, I know people who work there and they don't have any qualms. Some are students working there (because 24hr operations offer flexibility) and others just because they don't look elsewhere.
While people love to rant about the items Wal-Mart sells how do these same people explain the grocery sections? Same brands as the big supermarkets at significantly lower prices. Heck I can find similar names in their department side of the operation as I can at the mall and save money.
Which brings me back to the online experience. Customer service isn't the real issue, its ease of use, selection, and then cost which will make or break their service. Other than end user billing issues the downloading side shouldn't be that big of a problem. I don't think that the majority of users out there have sufficient bandwidth for high quality downloads.
Why should Wal-Mart get into this? Easy, because it has such a low cost of operation. Pay for bandwidth, the servers, and that is a lot less than a B&M existance. They will still have lots of DVD in their stores but when people finally give up buying DVDs Wal-Mart probably hopes to be established enough to get that business.
I still don't see why people think Apple's service is that great. iTunes is good, but the series and movies are not the quality I would pay for, especially at the price some of the offerings are. A friend told me that the XBOX service is the best way to go but I doubt I will buy a 360 just for movie downloads.
So Wal-Mart gives us a new option. The more the merrier. The free market is a much better decider than other approaches. If Wal-Mart succeeds then they will do so because they deserve it. If they fail, that also is their fault as well.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
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.
I think the bigger problem is price. At least for myself, I want to treat a download as a rental - get the movie quickly, watch it once and forget about it. However, according to the article, in order to keep the studios happy they have to charge a similar price to what the movie costs in stores (almost $15 for Superman Returns, for example). So you pay way more than a rental, but you don't get the cool packaging and liner notes that you would get if you bought it in a store. What is the advantage here?
Download my free songs!
It will succeed, just like Wal-Mart's DVDs-by-mail rental service.
There are already so many customers going to wal-mart, that even if the service is only used by a small fraction of their customers, it would still be a massive amount of people. That's the magic of wal-mart... super high volume!
stuff |
Then we agree, because so do I. Although my solution isn't to ignore it happening and rationalizing that it's okay because people obviously work there, it's for us to try to get them to stop.
The same way I explain their stores. If you don't mind digging through misplaced stuff to find what you're looking for, putting up with aisles that are three feet wide, standing in line for half an hour because there are only two cashiers, and don't have any questions about what you're shopping for because the people that work there ignore you and have no clue what the hell they're selling just so you can save a few cents on your Charmin, then Wal-Mart is a great place to shop.
I have too many incidents of unhappiness at Wal-Mart to recount them all here. The two that stick out in my mind were when I needed a few simple items one Saturday afternoon before Christmas several years ago. I walked in and saw two--two!--cashiers open, and people lined up too far to see. I would have been in the store at least an hour. I walked out, drove ten miles to the Target down the street, and haven't been to a Wal-Mart since. The other time was when I sprained my ankle and needed an ice pack and Ace bandage. Wal-Mart was the closest store to me (a mile or so away), so I drove down there, hobbled in, and hobbled back to the pharmacy section. A worker there who was stocking shelves literally watched me as I painfully limped up to her and said that my ankle was sprained, and I would appreciate it if she'd help me find the ice packs and Ace bandages. She pointed away and said, "I think it's two aisles over, maybe three," turned her back to me, and went back to putting the stuff on the shelves.
So yeah, you could say that I seriously doubt Wal-Mart will be able to do anything like run an online movie business competently, and even if the movies are, as I said, dirt cheap, I won't be using it.
Newsflash, ease of use and selection are part of customer service. Cost will be a factor, but I seriously down that the target market (no pun intended) for this service will be looking for movies that cost $2.95 to download instead of $2.99. They'll be looking for the stuff that Wal-Mart truly sucks at, stuff like, as you mentioned, ease of use and selection.
Well hell then, let's all get into the movie download business, since it's so cheap! You're forgetting the cost of developing and maintaining the software, marketing, and guaranteeing a certain level of service and uptime. These kinds of things are not cheap. If Wal-Mart takes their typical attitude of trying to do it on the cheap, you'll have software that is excruciatingly painful to use, lots of system down time due to back-end hardware and software issues, non-existent customer service and support for the mass of e-mail complaints that will pour in, and other such problems.
I don't propose anything different. I'm with you on this, let them compete in the ma
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!
And for an added bonus the link to Wal-Mart's video store within the story is broken.
Article link
Wal-Mart Video Store note: the site renders horribly in Mozilla & Firefox... at least for me.
If the govt becomes a lawbreaker, it breeds contempt for law, it invites man to become his own law, it invites anarchy
2) blah blah I'm smarter than wal*mart blah blah
3) blah blah wal*mart sucks blah blah
4) blah blah the link is wrong blah blah
You're welcome.
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.