Wal-Mart Upset About Upcoming Apple Movie Downloads

BusinessWeek Online has learned (Wal-Mart and Apple Battle for Turf) that Wal-Mart is upset about Apple's upcoming movie downoad service launch, and wants the studios to lower retail DVD prices to help them maintain 40% of the $17 billion DVD retail market.

Wal-Mart isn't the only issue that's giving some studios pause. Several are concerned about Apple's rules for using iTunes, which let users watch a film on up to five different devices. And others worry about letting Jobs set a download price they can't change, as he has done in music. Still, studios have embraced the digital concept and accept some "burning" of movies to DVDs.

via accelzone.

Comments

[gir]

Oh, boo-hoo-hoo Walmart. I detest having to side with the studios, but it's about time someone told this 900 pound gorilla that it can't control the whole world. It can buy DVDs at the wholesale price the studios set, or not. I for one won't miss Walmart if they exit the DVD business. There are plenty of other places to buy DVDs.

[scotty321]

Wal-Mart is one of the most evil corporations in America. I am not saying that as hyperbole, I am saying that as a FACT. They are right up there with Monsanto.

Check out the very insightful Wal-Mart documentary:
"The High Cost of Low Price":
http://www.walmartmovie.com

And, of course, it is available on Netflix:
http://www.netflix.com/MovieDisplay?movieid=70040809

[scotty321]

And by the way, is Steve Jobs the ONLY guy left in corporate America who actually sticks up for the little guy? That's US -- the consumer!

[noe638]

Walmart wants "marketing help when it launches its own planned download site. And it wants Hollywood to trim the current $17 wholesale price for DVDs."

Walmart is Evil, but not so much on this one...it sounds like they want wholesale prices to be trimmed to meet expected slump in demand and match what Apple is offering. The studios are going to be the ones that have to figure out how to balance the digital and physical distribution. Walmart is just looking out for their stockholders and their customers, as they should.

Walmart has every right to be concerned...although the margins they make on DVDs is small, the traffic that it adds for other purchases is immeasurable.

[noe638]

"Apple hopes to charge, now set at $14.99 for new releases and $9.99 for older movies, has risen from Jobs's initial plan to offer new flicks for $9.99, say industry insiders."

And whats with the 14.99 and 9.99 price points? Why on earth wouldn't they have variable pricing???? Is it really that much better for people to deal with a single price point? Especially when the cost to make movies, quality, and demand are so variable.

I don't get Itunes .99 either...am I missing something?

[corey3rd]

if the file isn't 3.9 gb - I'm not interested.

[somenobody]

"I don't get Itunes .99 either...am I missing something?"

The record companies would like all sorts of prices. If they could get Jobs to charge $2.39 for "Pon da Replay" and maximize their profits from that particular song, they would do it.

Jobs wants easy-to-understand pricing. If all music is the same price, ITunes will be more popular, more people will get IPods and buy more music, and everyone will make more money in the long run.

What if Netflix said a new release counts as two rentals in its first 90 days of release on DVD, 1 1/2 rentals in the next 45 days of releaase on DVD, 3/4 of a rental if it was released on DVD more than three years ago, and one rental if it doesn't fall in any of those categories? Netflix would maximize its profit from certain DVDs. People would quit, and Netflix would make less money in the long run.

[Super-Bat-Man]

just go to mp3search.ru

everything is like .10

[type-cast]

"If all music is the same price, ITunes will be more popular, more people will get IPods and buy more music, and everyone will make more money in the long run."

Getting all you want for a flat monthly rate will be even better. Pay-per-view can't beat unlimited. It's better for the artists: more exposure. It's better for the customer: more choice. Paying for each film (or song) is a dead business model. Give us all we can eat.

[Super-Bat-Man]

why are companies complicating movie watching with all these extra steps involving computers.

"oh you wanna watch a movie lemme get computer out, and connect it to the tv, ok wait takes a minute, give it a sec, ok it's not working ok hold on, letme start over. Ok IT SHOULD BE WORKING NOW. what it looks like crap? yeah well the resolutions don't match so we have to see the computers desktop in the background the entire time. oh by the way we have to listen through the speakers on the laptop. "

It doesn't make sense it is a step down. by the time the movie is done downloading it will be tomorrow. and by then you could have rented or bought the movie from netflix or blockbuster and had it delivered for free.

People just want a dvd they can put in their dvd players flop down on the couch or bed and watch it, then put on their shelves until a friend borrows it and then never see again.

[murphyslaw]

"And whats with the 14.99 and 9.99 price points? Why on earth wouldn't they have variable pricing???? Is it really that much better for people to deal with a single price point? Especially when the cost to make movies, quality, and demand are so variable."

you are aking this comment on the hacking netflix site? Huh? your paying the same rental price for blockbuster that cost $200 million dollar blockbuster which retails for $25 a you are for a yoga dvd that cost $50,000 to make and reails for $5!

If anything both netflix, blockbuster AND iTunes have proven people want to pay the same price.

Woould you support netflix counting a new relase blockbuster for effectively five rentals? (answer: no)

[type-cast]

People don't want to worry about buying each download or rental. They want true unlimited service. You can't compare iTunes to Netflix or Blockbuster Online. They're not the same. Studios are clinging to the old distribution model and crippling technology with DRM. The customers don't want to be nickel-and-dimed. They want more choice and value. The studios want to go on living in the past. Before the internet. Before p2p. Before Netflix.

[noe638]

"Huh? your paying the same rental price for blockbuster that cost $200 million dollar blockbuster which retails for $25 a you are for a yoga dvd that cost $50,000 to make and reails for $5!"

That is a flawed analogy. Netflix is an all-you-can-eat pricing model (in theory), while the schema they are presenting in this article is pay-per-view.

The Netflix model is based on not removing late fees and allowing the customer to keep the title as long as they like.

Itunes charges fixed pricing for simplicity, which is valid, but just because people are buying music online at that price, does not mean it is the best model going forward.

It would be nice if your local indie band could put their music on iTunes and sell them for $0.10 apiece or $1 for the whole album...By the same token, for movies, it seems crazy that someone would have to pay $15 for a great movie that 2 guys made in their garage.

[type-cast]

"The Netflix model is based on not removing late fees and allowing the customer to keep the title as long as they like."

I think you typed "not" by mistake. Netflix model IS based on removing late fees. Also, most people will spend more for an unlimited plan than buying individual titles. Think of how many subscribers HBO or Starz have, and how many people buy pay-per-view movies. The studios are shooting themselves in the foot.

[noe638]

What he said...thanks type-cast.

[wholesale dropshippers sources]

walmart has control of everything. why are they complaining about this.