Wal-Mart Intros Movie Download Service

Retailing super-giant Wal-Mart announced this week a new movie download service that will compete with similar services from Apple Inc., CinemaNow, and MovieLink. But Wal-Mart is offering a single major benefit over other services: Unlike Apple and the others, Wal-Mart is selling movies from all five major movie studios, a first.

A beta version of the Wal-Mart Video Downloads service is now available from the Wal-Mart Web site. The company is offering about 3,000 near-DVD-quality Hollywood movies for download, at prices ranging from $12.88 to $19.88, and it will offer new movies for download the day they are released on DVD. Wal-Mart is also offering TV show downloads for $1.96 an episode, about 4 cents cheaper than TV shows purchased from Apple's iTunes Store.

Wal-Mart's entry into this market is considered monumental, even though its online music service generated little attention. That's because Wal-Mart is responsible for over 40 percent of all DVD movie sales in the US, and movie studios are wary of angering the company. So while Apple was only able to attract two movie studios, Disney and Paramount, and offers a woefully small catalog, Wal-Mart is entering the market with all studios on board.

Wal-Mart has another advantage as well: Its download service utilizes Microsoft's Windows Media technologies, which is immediately compatible with the vast majority of PCs used worldwide, as well as a diverse group of portable devices, Media Center PCs, and other devices. Downloads from Wal-Mart will not play on Macintosh computers, which constitute less than 3 percent of all PC users worldwide, or on iPods. (The latter, of course, is more problematic given the iPod's success.)

For Apple, however, all isn't lost: Wal-Mart's entry into this market now frees movie studios to make deals with other online services. Previously, many had feared upsetting Wal-Mart by jumping onboard with Apple, which still dominates online sales of music, movies, and TV shows.

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