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Look out, iTunes Store, Wal-Mart's coming to getcha!
Retail megagiant Wal-Mart today launched a beta version of its new Video Downloads service - a direct shot across the bow of Apple's iTunes Store. At first blush, the challenge seems muscular: Wal-Mart offers 3,000 films and TV shows to Apple's 600, from six major studios compared to Apple's Disney and Paramount. Prices for downloads are comparable, with Apple holding a bit of an edge by offering some films for $12.99 if pre-ordered and during the first week that they're available on the Store, and Wal-Mart beating Apple by offering older movies for $7.50 compared to Apple's $9.99.
TV shows are available in 320-by-240-pixel resolution in what Wal-Mart calls its Portable Format option, "optimized for fast downloads and viewing on the go." Movies are available to two forms: 640-by-480-pixel resolution in a PC Format option, plus in a two-file bundle with the same film also in the Portable Format option. Wal-Mart also adds an all-caps warning that "PORTABLE BUNDLE FILES ARE NOT COMPATIBLE WITH iPODS." Neither films nor TV shows purchased from the Video Downloads service will be able to be burned onto DVDs, though there are reports that Wal-Mart wants to add this capability later this year.
The most impressive part of this development is that Wal-Mart was able to use its clout to cut deals with all six major studios - clearly they were able to convince the studios that digital downloads are merely an adjunct to DVD sales, and not a replacement. After all, the majority of American consumers still prefer to watch movies on their TVs, and not on their computers - and now Wal-Mart is positioned to enable both itself and the major studios to profit from movies destined for both viewing methods.
Wal-Mart's success in this endeavor is not, however, a done deal. While a vast array of content is a definite plus, the consumer experience of finding, downloading, and paying for that content is of equal - if not greater - importance. Our first experience with the service shows that it is, indeed, a beta - in Firefox (as of this morning) the service looks like this. In Safari, however, all seems to work well, although the presentation is pedestrian at best. The beta service has none of the preview capabilities of the iTunes Store, and as of this morning its search functions were limited and browsing next to nonexistent.
Apple has a clear lead in mindshare, usabability, and elegance. Wal-Mart has more content to choose from, and good relationships with all six major studios. Mere muscle is not in itself enough to unseat an established market leader - note, for example, Wal-Mart's abortive effort back in 2005 to challenge Netflix for the title of top online DVD-rental source, which went nowhere.
In any case, the battle has been joined, all six major studios have jumped into the fray, and digital downloads of films and TV have just been officially embraced by the world's largest retailer.
Apple's already ahead of Wal-Mart in many important areas. Now it needs to increase the amount of its offerings - if the major studios will play along.