Wal-Mart debuts online movie download store

Feb 5, 2007: Wal-Mart Stores Inc. is set to debut its online movie download store Tuesday and sell digital versions of about 3,000 films and television episodes from some major studios and TV networks.
Wal-Mart, the U.S. largest retailer, is using its buying power to beat the prices charged by other download services, offering films from 12.88 U.S. dollars to 19.88 dollars and individual TV episodes for 1.96 dollars to 4 cents less than Apple Inc.'s iTunes store, local media reported.
However, movies bought from the Wal-Mart store can't be burned onto a DVD, although the company said it hopes to offer the option by the end of the year, and the company doesn't expect digital sales to cannibalize its retail DVD business for many years.
"Customers have a growing interest in downloading video content, but complementary and supplemental to buying content on DVD," said Kevin Swint, Wal-Mart's divisional manager for digital media.
"With the health of the DVD business and coming high-definition formats, that business will remain quite strong for quite a long time," Swint added.
The biggest impact of Wal-Mart's entry into the digital download business may be that it now frees studios to cut deals with other online services, media quoted analysts as saying.
"It gets the ball rolling finally," said Tom Adams of Adams Media Research. "Now the studios are free to pursue it as aggressively as they can without worries about what Wal-Mart is going to think."
Amazon Inc. launched its "Unbox" video rental and download store last year without films from Disney. Other online download and rental sites include Movielink, which is owned by five studios, and CinemaNow.
Internet downloading is expected to generate about 4 billion dollars in annual revenue in five years, compared with an estimated 27 billion dollars from DVD rentals and sales, according to Adams.