Two major retailers have moved into the online movie sales business. WalMart and Amazon.com join existing properties in trying to convince the consumer their downloadable wares are more attractive than other, less “official” options. Do their services offer anything significantly different than the current players in the market, or is simply a case of the same limited options with different labels?
WalMart announced its entry into the download field at mediadownloads.walmart.com. At least, that’s one of their promotional sites. WalMart enters the fray trumpeting licensure with all of the “big six” movie studios. That one feature does provide an advantage in that is allows them to offer a selection that eclipses most of the competition.
There is little else that is unique about it, however. There is download software made available much like Apple’s iStore, but it utilizes Microsoft’s DRM piracy protection technology. That means the service won’t operate over Firefox or other browsers and won’t run on Zune, PSP, iPod, or computers running Mac or Linux.
WalMart sells about 40% of the DVDs in this country and says they’ll provide price protection for their products on the shelves. That means you won’t see much of that to-the-bone price cutting on downloaded products. Prices will range from a couple of bucks for a TV show up to close to $20 for a film in recent DVD circulation.
The other challenge for WalMart is their corporate policy that every product they sell should be designed to draw customers into their stores. A product designed to deliver itself to your PC isn’t going to do that. Currently, Walmart spokesmen are saying that their intent to bundle a movie download with the purchase of a DVD will meet that requirement.
That’s WalMart’s answer to delivering your download to the TV screen. It seems somewhat duplicative, but they are chasing the business in a big way. Wal-Mart’s online video-rental service failed to do just that, and the corporation folded up the business after a relatively brief test drive.
Amazon’s version of the video download service is called Unbox. They too are a major retailer for DVDs and see this business as complimentary. Their only marketing responsibility for the product is to drive people to their website – unlike the brick-and-mortar based WalMart.
Amazon launched without Disney, which is a major player in the Apple online video product development. That may have something to do with the fact that, when Steve Jobs sold the Pixar animation studio to Disney, he also became their biggest shareholder. At any rate, Apple’s movie products are limited to Disney and Paramount. The other online services such as CinemaNow and Movielink are all also missing one or another of the major movie houses as partners.
What Amazon has done to bypass the issue of portability with downloaded movies is to develop a partnership with TiVo. The later versions of the TiVo recorder will be able to download Amazon delivered films and play them back on your television. With the rest of the Internet-delivered video companies, the downloaded product pretty much remains trapped on your download device. Apple’s films can be downloaded by some iPod products and other handheld players, while WalMart, at the moment, is wedded to the PC.
It’s a smart move on Amazon’s part – four out of the six major movie studios and a television viewing partner. That relationship is limited, however, by the fact that TiVo’s current distribution base of boxes with internet connectivity is a little over 1.5 million units. It’s a start, but a small start on dealing with getting that downloaded movie to your television. Apple is planning a similar set top box to provide the same viewing capacity.
According to PricewaterhouseCoopers, the Internet video download business is expected to be worth $3.7 billion in annual revenue in 2010, when DVD rentals and sales as a business will amount to about $29.5 billion.