Wal-Mart Closes Online Movie Download Service

eldavojohn writes "A year after opening its movie download service, Wal-Mart has abandoned the endeavor. They claim this is a result of HP's decision to stop supporting its video download store software. The article also notes that, unlike iTunes, Wal-Mart offered variable pricing which attracted a lot of studios. 'The world's largest retailer instead turned its rental service over to Netflix Inc. Wal-Mart still operates a music download service and continues to sell CDs and DVDs at retail stores and over the Internet for shipping by mail.' Is this evidence of the strength of unified pricing in media downloads or just another company being squished by the giant Netflix & Apple?"

Comments

Wal-Mart "squished"?

[Anonymous Coward]

Wal-Mart "squished"? I'd like to see that honestly.

Re:Wal-Mart "squished"?

[MBraynard]

Walmart doesn't fit into this 'life style'

If that were true, then the city wouldn't have needed to pass laws to make it impossible for WM to open up.

Chicago is surrounded by 42 Wall-Marts and the city-dwellers are exceptionally eager for WM jobs and services. Witness this from George Will's column on the issue:

This suburb, contiguous with Chicago's western edge, is 88 percent white. A large majority of the customers of the Wal-Mart that sits here, less than a block outside Chicago, are from the city, and more than 90 percent of the store's customers are African American.

You can read the full column here.

Every political criticism of WM - everyone of them that I have ever heard - is a lie.

Re:Wal-Mart "squished"?

[Divebus]

Wal-Mart got squished by doing what the studios wanted, not what the consumers wanted.

Cost and lack of extras the reason.

[Jason Levine]

I never used the service myself, but apparently, the movies cost $20 each. For that price you could back up to DVD three times, but not to a format that played in a DVD player. Also, you didn't get the extras that typically come on a DVD. So you paid more money, for less content, that could be used in less places. And they wonder why it wasn't successful?

Re:Cost and lack of extras the reason.

[Facetious]

I simply don't have much free time... ...says the guy posting to /. (Sorry, I couldn't resist.)

Squished?

[cheebie]

Do they actually think Netflix squished something run by Walmart?

That's like saying the local burger joint is going to crush McDonalds! Sure, Netflix is a big company, but they're nothing compared to the Wally-world behemoth.

Re:Squished?

[timster]

Sure they did. In this case, it wasn't even hard.

Sometimes a big company will try some new endeavor to much fanfare, but not bother to try very hard, assuming somehow that they will win because they are big. When that happens it's easy to take them out. Wal-Mart had no plan here; they just thought selling some videos at terms dictated by the studios might get them some cash. If they ran their retail stores that way, those would fail too, but they put serious effort into their retail stores.

Re:Squished?

[0100010001010011]

"Walmart is large, but it is horribly inefficient"

I hate my local Walmart as much as the next guy. And individual stores may be inefficient or suck. But the corporation as a whole is extremely efficient. I work in the trucking industry. Walmart is one of the companies that can afford to spend $1000 on an experimental MPG increaser. Whether it be APUs for the trucks, side skirts for the trailers, single tire rears, etc. If engine company X can provide .1 MPG extra per year on average, that's in the hundreds of thousands of dollars for Walmart.

They forced use of APUs on ALL trucks after doing a trial run. At a trucking conference they presented their savings broke even at 16 months. Now a ton of other companies are following their lead.

I thought I read on /. that they're going to RFID. As soon as Walmart forces RFID, maybe we'll see it everywhere. UPC is nice but old.

I don't have a lot of nice things to say about walmart, but that they're inefficient isn't one of them.

Wal-mart does what it does

[beckerist]

Wal-mart is successful because it has a very efficient method of physical distribution. This has no baring on their success in digital distribution.

Re:Wal-mart does what it does

[moderatorrater]

Let's not forget that Wal Mart was the first to really push a large number of stores in medium-sized cities. My hometown (~10,000 people) has three other comparably sized cities within a 5 minute drive and then one much larger city within a 15 minute drive. All of the other chains were opening stores in the large city 15 minutes away when Wal-Mart opened one in my hometown and one in the larger city. Effectively, this made it so that one Sears had to compete with two Wal-Marts but, since each Wal-Mart targeted a smaller area, only one of the Wal-Marts competed with the Sears.

I read somewhere that 75% of all KMarts and Sears competed with a Wal-Mart, but only 33% of Wal-Marts competed with a Sears because of this strategy. When you can beat your competitors on price, location, and convenience, you're going to do well no matter what.

Re:Wal-mart does what it does

[LanMan04]

Your sig makes me want to kill you. :)

It's Walmart

[techpawn]

When the download becomes the same cost as buying/shipping physical media I think most Wal*Marx shoppers would rather have the physical media. Knowing a lot of people who WILLFULLY shop at their "super centers" and also Not so willfully work there, they are generally not the most technically inclined.

HP Dropping support sounds like a cop out... but a believable one

Businesses are NOT swiss army knives

[mcsqueak]

Is this evidence of the strength of unified pricing in media downloads or just another company being squished by the giant Netflix & Apple?"

I think this is evidence of businesses trying to be too many things to too many people and slowly discovering that no, you can't be everything to everyone. "Jack of all trades, master of none" indeed.

Focus on a specific market and DO THAT WELL.

Outside the Core Competency

[RobBebop]

While hindsight is 20/20... this is a classic example of an "Old media" company failing to adapt to the "New Media" because they didn't have any expertise in the current technology.

Wal-Mart's core competency is managing their supply chain. They make money by being the most efficient supplier of products that are in local demand. They operate their integrated technological systems marvelously. They don't know jack-shit about the internet and "download-able content". They should partner with Amazon to run their webpage... though that would probably start to enter into an anti-trust area.

All of Wal-Mart's eggs were in HP's basket

[Sloppy]

Is this evidence of the strength of unified pricing in media downloads or just another company being squished by the giant Netflix & Apple?

If you believe Wal-Mart's explanation, it sounds like this is caused by relying on single source software maintenance. Hey, software users: GPL is for you. It's not a hacker thing.

No contract with HP?

[NonSequor]

Why didn't Walmart, of all companies, get a contract that insured that HP couldn't bail on them?

DRM is what kills it for me.

[headkase]

I refuse to download anything that has DRM on it. Especially considering that right *now* I buy my DVD's through retail channels and rip them myself (my country doesn't have DMCA idiocy preventing that) to the format of my choice. And when I switch around operating systems I don't fall into the trap of "sorry you're unsupported". Buying retail and ripping myself is what suits me best right now. Maybe when online retailers realize that DRM actually does nothing to stop piracy and only pisses off the people who actually do buy the product they'll drop it. And when/if they do drop DRM then I'll buy online instead of retail.

Probably had code escrow but...

[SuperKendall]

You can't have a contract that compels another company to do something forever, that's just not practical.

I would bet they did have a code escrow agreement - in the event HP decided to back out of doing the software (which they did) WalMart gets access and use of all the HP source.

The fact that Wal-Mart is shutting down operations shows exactly what use code escrow is - jack and squat. What is WalMart going to do with a bunch of hacked together HP code, without any of the people who worked on it?

Plus in general a problem with code escrow is that you can't look at the source before you take it over to see how feasible that proposition really is.