digg

Join DiggAbout

Discover the best of the web!
Learn more about Digg by taking the tour.

Wal-Mart and Apple Battle for Turf

businessweek.com — The retail behemoth isn't happy about the iPod maker's plans to offer movie downloads through iTunes. Has Wal-Mart met its match?

Bury
show profanity settings
expand all
  • elebrio, on 10/12/2007, -17/+14Hate 'em or not, Wal-Mart is the best run company in America and I believe their model will win out. I ran across another article submitted to Digg today from Mark Cuban:

    http://digg.com/business_finance/Mark_Cuban_on_the_Movie_Download_Business_Model

    Normally I can't stand the guy, but he's absolutely right about movie downloads. How many people do you know that have an enormous dvd collection and don't mind shelling out $15-20 to own a legit copy because it's an impulse buy, it doesn't eat up their bandwidth (maybe Europeans are less sensitive to this than us Americans with crappy connections), and they have a copy with the original artwork that fits perfectly into their dvd shelf, rack, thingy whatever. I know I'm one of those suckers willing to pay more, because I'm too lazy to wait to DL & burn. As a result, I think the whole thing is a little overblown.
    • MikeCerm, on 10/12/2007, -8/+14Has Walmart met it's match? Yeah, right. I hate Walmart just as much as the next guy, but if you think that Walmart's "Middle-America" shoppers are the movie downloading type, you're totally wrong. They work at Walmart, they shop at Walmart, because Walmart put every other store out of business. The other weird thing is that it's almost like Stockholm syndrome. Walmart shoppers are really loyal to Walmart, like Walmart is doing them a big favor by selling them stuff cheap enough to kill off the competition and then raising prices.

      Furthermore, if you don't live on the east or west coasts, it's not uncommon to find that most people have never seen a Macintosh, and many don't know that Apple exists. Apple primarily exists in "blue" states.

      I think that Walmart will be fine.
    • bollingj, on 10/12/2007, -2/+7@MikeCerm

      I would question you on the red state - blue state issue... But I believe I get you point, your talking about normal users. Tech people, no matter what state they live in do use Mac's, but then again most programmers I know don't shop WalMart.

      I guess I answered my own question here.
    • digitaldivider, on 10/12/2007, -16/+8apple vs. walmart? that's like comparing ***** to ergodynamic, shiny *****.
    • kingofthisnight, on 10/12/2007, -8/+13"Wal-Mart is the best run company in America" Tell me that is sarcasm.

      Honestly? About that... I am pretty sure they got in trouble not to long ago for using illegal labor, they are completely against unions, and they rarely bother to hire full-time workers so they don't have to pay benefits. Also Wal-Mart is the only place I know that can bring together that much white trash into one area other than a Nascar event or maybe a country music concert.
    • Vejadu, on 10/12/2007, -4/+7"Furthermore, if you don't live on the east or west coasts, it's not uncommon to find that most people have never seen a Macintosh, and many don't know that Apple exists. Apple primarily exists in "blue" states."

      I live in the midwest and am typing this from my office which is 100% Mac (+ a few Linux boxes). Plus I've been boycotting Wal-Mart for years.
    • mc900ftjesus, on 10/12/2007, -8/+3Wow, thanks for the red vs blue state anecdotal evidence. I like the way you started your wild, unsupported speculation with "I think that..." Like we're all going to pretend to believe some douche posting comments on digg knows anything outside of the back of his mom's van. Did you post this before the bell rang this morning or do they let you access digg from the school library?
    • migitalwarfare, on 10/12/2007, -2/+2@kingofthisnight

      pretty sure he meant that wal-mart's business model is the best in the world. if it wasn't, they wouldn't be one of the largest companies in the world. business models and business practices are two different things. wal-mart's business practices are horrible, but their model is almost perfection as far as beating competition and increasing sales/income.
    • willcode4beer, on 10/12/2007, -2/+2Love em or hate em, its this:
      http://finance.yahoo.com/q/bc?s=WMT&t=my
      vs this
      http://finance.yahoo.com/q/bc?s=AAPL&t=my
  • superbaka, on 10/12/2007, -2/+12The exact same statement was legitimitely made 10-15 years ago regarding compact discs. Now, I don't own a single one. My shelves are empty (actually, filled with more important things that can't be digitized) and the artwork shows up on my iPod. Give it time.
  • Nick22, on 10/12/2007, -2/+10I only download movies (illigaly) when its too late to go see it in theatres and I dont wanna go rent it, but im interested in seeing what its like. If I like it, I go out and buy the movie. I did that with V for Vendetta. So ya anyhow I like buying the DVDs themselves rather than downloading them. However I hate how expensive movies are, at least here in canada. Like friggin 30-50 bucks just to get a movie. Thats as much as a video game, and video games are expensive!
    • blankartist, on 10/12/2007, -6/+1$30-$50 for a DVD? Where the hell are you buying them? Blockbuster?
    • ravenofwinter, on 10/12/2007, -1/+8Dude, he said Canada. That exchange rate is a bitch.



    • cbiz, on 10/12/2007, -2/+1Downloading movies motivates me to buy used DVDs. I like Hollywood out of the equation and it supports small retailers in my area. I live in a blue area but voted red and would not make purchases WalMart. They may be smart but I know how this company grew and I don't support it. DRM iPod movies you can also keep.
  • fungke, on 10/12/2007, -1/+4"Fox Entertainment Group may join in later, as might independent Lions Gate Entertainment, say Hollywood sources"

    It already was confirmed, a couple weeks back, by Jon Feltheimer (CEO) of Lionsgate Films that a deal was signed with Apple to distribute through iTMS.
  • flamingmb, on 10/12/2007, -1/+10I hardly think walmart should complain.
    • MobbyG, on 10/12/2007, -1/+2Agreed. They're only worried because they won't have as much slice of the pie! They use strong arm tactics to get manufacturers to sell to them cheaper, forcing the manufacturer to cut cost on quality items.

      They tried to pull that on Snapper mowers and Snapper "snapped" back!
  • yesno, on 10/12/2007, -5/+2Very fun to read how Apple is doing.
    • spinchange, on 10/12/2007, -0/+1Steve Jobs has leverage over everbody it seems, its incredible.
  • baalzebub, on 10/12/2007, -9/+3anyone would be a fool to sit watching a movie on the ipod with a screen no bigger than a saltine cracker, i will stick to watching TV in my living room on a normal size TV...
  • paulmdx, on 10/12/2007, -0/+3I believe store based movie distribution will give way to electronic distribution over time. However, I don't think it will be sales that drive this, it will be rental. So yes, Apple may win out to Wal-Mart. Of course in the UK stores like Tescos already offer digital music online.

    When I buy a movie I want the ability to watch it at a friend's house, let a friend borrow it, or sell it should I get bored, and so on. With DRM movies, unless the movie is a lot cheaper, I will never buy a perpetual licence. What I would do is rent a movie once that maybe I wouldn't consider buying.

    It's interesting to me how this is different to music. There's more justification for me buying digital music as I know I will get more value out of a perpetual licence. That said, even with music I hate not having something physical in a box that I can play in my car and rip without DRM.
  • mikeandike22, on 10/12/2007, -6/+2The people that WalMart makes their money from are the kind of people that dont know how to use the "Intarnet" lol. I doubt they will loose money or anyone who sells hard copy movies. I would either download it on bit-torrent or buy the dvd but not pay for a download.
    • paulmdx, on 10/12/2007, -2/+5Is that the same kind of person that types "lol" at the end of a sentence when they're not actually laughing out loud? ;-)
  • ajcannon, on 10/12/2007, -6/+5/* begin sarcasm
    how dare you mention Wal-Mart and Apple in the same sentence. They are completely different companies. Wal-Mart is just a greedy American company who is out to make money, and Apple, well they are, well, you get the picture.
    */
  • bollingj, on 10/12/2007, -1/+6I'm not a WalMart shopper and hate going there... but will admit they seem to make a success out of everything they do. More power to them if they can, after all it is a free market.
    • PKLowe21, on 10/12/2007, -0/+0This is as if one big drug dealer complaining about another being able to sell crack cocaine online, Wal Mart has nothing to complain about. They have put many Mom & Pop stores out of business, a little retribution won't hurt.
  • thatnimrod, on 10/12/2007, -0/+5its gotten to the point now where i don't go see ***** movies (ie: fast and the furious tokyo drift) but i might download them. the main reason i do this is because i refuse to pay $11 to watch a poorly written movie that a couple of execs in some far off hollywood office drilled out using their standard old formula. however, not all movies these days are that bad, so i tend to give most of them a chance by "previewing" through bittorrent. if, in the process of going through movies i've downloaded, i discover a rare gem, i do not hesitate to hand over my hard earned cash to see it in-theatre. but pay $14.95 to download the dvd? that's a bit steep. now it'd be one thing if it's really good quality and maybe you get a few extras (a la iTunes album exclusives) but still... let me put it like this: it'd be far and few between that i'd actually consider buying through iTunes. it's more expensive than an in-movie experience, lower quality than a DVD (it'd have to be), and i still have to watch it on either my ipod, my computer or my tv--sans surround sound. but maybe i'm not who they're trying to sell this to. either way, Walmart doesn't even come into the equation on movies so god knows why they've got a guy roaming around Hollywood scaring the crap out of execs, threatening this and that, and the execs in turn try to scam Apple into charging more. i guess the only real factor is this: would joe shmoe ipod buy this??
  • Seumas, on 10/12/2007, -4/+5I have lived four blocks away from a Wal-Mart for almost two years now. I have been there once. They didn't look like they had anything interesting. Even their "grocery" portion of the store was nothing more than a glorified 7-11. Barely anything healthy. I don't even remember if there was fruit or veggies. There was row after row of sugary cereals and poptarts and other things. It really did have the nutritional sense of a giant 7-11.

    Haven't ever been back.
  • adriantr, on 10/12/2007, -3/+1WalMart will be fine. Movie downloads wont take off. Only costs a little more to get the full DVD with a tonne of special features and you dont need a DVD Burner to do it. Or even a computer for that matter!
    • MacParrot, on 10/12/2007, -1/+1@adriantr
      "Movie downloads wont take off"

      They may not take off now, but eventually everything that is capable of being delivered electronically will be. WalMart is upset because a cash cow is slowly dying. So in order to extend the life of their patient, they're bringing to force all the threats they can to get the studios to lower the prices of their releases. At the same time, trying to force digital content providers (this isn't about Apple, so Mac/iPod haters get off it) to raise their prices to the point where downloads aren't worth it. Let's also remember that WalMart isn't doing this to look out for their customers, they're doing it because their own online store isn't ready yet.

      Currently, downloaded movies are of a lower quality than DVDs. Eventually compression technology will get to the point where it won't make a difference. Watching movies on a 2-3 inch screen is a pretty crappy way to go as well. I didn't buy a video iPod for this reason as my nano plays music and is integrated with my Mac very nicely. Bigger players with improved screens are also coming. Whether they come from Apple or someone else is immaterial. I'll buy the one that works best for me.

      Speaking of which, want my money? Make it Mac compatible with similar to iTunes ease of use for storage and cataloging. Otherwise I'll just wait for Apple's solution.
  • TheReport, on 10/12/2007, -4/+9"Wal-Mart isn't happy"

    Good ***** em...
    • willcode4beer, on 10/12/2007, -0/+2I'm always amazed at how everybody claims to hate Walmart and "never" shops there. I swear I don't know anybody that admits to shopping there. Yet, their parking lot is always full......

      The most amazing thing I've seen at wally-world is a guy looking at kitchen appliances with his wife. He was wearing one of those pro-union t-shirts that reads "just so no to imports", while picking among the Chinese blenders.
    • molecool, on 10/12/2007, -0/+1"Go ***** em"

      Exactly the response I was thinking of. Where do these ***** dinosaurs get off on thinking that they 'own' anything? You can't compete with downloadable movies? Well, you might want to consider to ditch your lame-ass DVD section and use your fortunes to create a kick-ass movie distribution site.

      Yet another example of those monster corporations thinking they enjoy some kind of entitlement.
  • ahhell, on 10/12/2007, -4/+1Umm..who the hell wants to watch a movie on an iPod or a computer anyway?
    • Slyder, on 10/12/2007, -0/+1Maybe someone who has a Media Center computer, or TV out?
      Or someone who simply wants to watch it at their workstation
    • geekdreams, on 10/12/2007, -0/+1People with iPods and computers, who like movies.
  • Eldoo77, on 10/12/2007, -1/+3Let me get this straight... Wal-Mart wants to get into the business of making overrated, overpriced hardware for "artsy" zealots? Is the CEO of Wal-Mart really going to start wearing obnoxious black turtlenecks and start using trite overused phrases like "...just one more thing" Gee, I hope not!
    /puts on flameproof suit
    • MacParrot, on 10/12/2007, -3/+1One thing he is sure not to do. Make snarky comments about hardware he doesn't use for the sake of making snarky comments. What a waste of time.
    • Vermifax, on 10/12/2007, -4/+2There definitely should be an age restriction here at Digg.

      I guessed if I worked part-time in the Wendy's drive-thru, I'd be stuck in Dell Hell too.
  • weareglass, on 10/12/2007, -0/+1All I know is, there is going to be a fascinating chapter of Owen Linzmeyer's Apple Confidential book when it gets to 4.0 or 5.0 that gets to the real reason for these delays in the video iPod and movie downloads. Is it hardware? Hollywood? Only time will tell.
  • gxcdesign, on 10/12/2007, -0/+1Lions Gate Film is one of my fave distributors now, they have a strong backbone of movies of all sorts, so expect a good launch and lineup of movies.


    Btw, just wait for sports related movies to be released, I know I can't find the 1985 Bears DVD anymore, and won't mind having it on my iPod.
  • diggbrian, on 10/12/2007, -0/+1I agree with ahhell... If you can't produce the same quality as you would get from the DVD, then I can't see paying $14 for a movie that's only as good as iPod or computer quality. I like watching movies on my DLP, sitting on my couch with the family.
  • besprenbrian, on 10/12/2007, -0/+2competition in free market place is cool it's great for the consumers!!!
    • weareglass, on 10/12/2007, -0/+2Competition is great but strong-arming suppliers into pricing a new technology out of its market is certainly no good thing for the public
    • kingofthisnight, on 10/12/2007, -0/+3Yeah competition is great until all other forms of retail and grocery stores go out of business because of competition. I went to high school in a small town in Kansas and I went back a few months ago to visit some friends to find the towns only place to shop at now is Wal-Mart. There had previously been 3 other grocery stores around town and now all of them have closed. Not to mention all the "mom and pop" stores have closed now too. Yeah competition can really be a great thing.
  • dreserd, on 10/12/2007, -0/+2Strong-arming is what needs to be done. Hollywood will have to become more efficient at their distribution and production. Especially if they want to see the same huge returns that they have enjoyed over the years at the expense of consumers.

    We've been overpaying for CDs and DVDs for a long time because no retailer or consumer group has gotten together to challenge the industry. I hope Wal- mart does get the lower wholesale prices. Even though Wal- mart sucks, it's nice to see their practices benefiting open markets in some way.
  • stlloftstyle, on 10/12/2007, -0/+1I dont know about you but I caught pause when I read this sentence at the bottom of this article:

    "Wal-Mart acknowledged that it's talking with studios about starting its own download service but disputed that it is "dissuading studios from conducting business with other providers," according to Wal-Mart spokeswoman Jolanda Stewart. "

    Dissuading studios from conducting business with other providers sounds Wal-mart is attempting to secure a monopoly in this marketplace. I don't understand how they can get away with blatant statements like this.
    • ijerry, on 10/12/2007, -0/+1"Jobs would not comment for this story nor would any studios. Wal-Mart acknowledged that it's talking with studios about starting its own download service but disputed that it is "dissuading studios from conducting business with other providers," according to Wal-Mart spokeswoman Jolanda Stewart. " It says here that Wal-Mart DISPUTED that they are dissuading studios. So, they are clearly covering their collective *****. At any rate, I would love to see this on iTunes, which would have to be changed to iMedia or something I would guess after adding more content than just audio...
  • bi0metric, on 10/12/2007, -5/+3All I can say is APPLE SUCKS!!
  • f1055man, on 10/12/2007, -1/+2"So far, other large studios have taken a pass, especially after Wal-Mart earlier this year threatened not to sell Disney's High School Musical for a time after Disney released it initially only on iTunes."

    Mr. FTC, Steve Jobs is on the phone. Something about anti-trust.

    Not that Apple's snow is pure white either, but MalWart has a habit of walking into billion dollar lawsuits. MalWart: White trash cannibalism served up by the good ol' boys from Bentonville, Arkansas.
  • lukas88, on 10/12/2007, -1/+3I predict in 10 years that downloads will replace DVDs and even HDDVDs
  • Chewie67, on 10/12/2007, -2/+4I'd love to see someone slap Walmart in the mouth a bit. They're big, arrogant and cocky. They're notorious for being ruthless with their suppliers, and have driven several companies out of business by demanding near-cost pricing or banning their products from the store shelves.

    If Apple's the company to do that, so be it. Go Apple!
    • geoncoder, on 10/12/2007, -0/+0 Its called monopsony. I did paper on Wal-Mart and the strong arm tactics they use on their suppliers. Go Apple!
  • dreampilot, on 10/12/2007, -0/+2You can't compare Wal-Mart to Apple as companies. One is a RETAILER only - the other one is a MANUFACTURER who has RETAIL operations.

    And this notion that only blue states use macs is making me want to stop coming to digg because what used to be informed discussion has become a bad version of talk radio.
  • geekdreams, on 10/12/2007, -0/+2A few things:

    1.) Wal-Mart doesn't have anything to worry about *now*, but I'm sure they've seen a decline in CD sales the last few years and they don't want to see the same thing happen with DVDs in the future. Even if they lose only 1% of their movie sales, it's 1% Wal-Mart is loathe to give up. Plus they know that if Apple's movie store is a success, Microsoft and others will be quick to follow, and their own profits will decline exponentially.

    2.) Apple has enough customers in its iPod/iTunes universe to make a movie store profitable, even if they only get 1% of overall movie sales. We had this same exact conversation when iTunes got TV shows ("Sub-par quality", "Costs too much", "DRM sucks", "Who wants to watch TV on an iPod?"), and that part of the business has already proven to be a success. I used to work at Apple in the iTMS support deptartment, and I can tell you from experience that "average people" were very excited about the prospect of downloading their favorite shows and were willing to shell out $25-30 per season for the privilege. Adding feature-length films will only drive sales up, and at very little relative cost for Apple.

    3.) Convenience trumps quality every time. Ever hear of fast food? Automatic carwashes? E-mail? It's easier to click a button on your screen than it is to go out to the store, and the movie will be ready to watch by the time your pizza arrives. The difference in picture quality will be negligible for most people, and the selection could eventually rival Netflix or Amazon in available titles.
  • fuchila, on 10/12/2007, -0/+2I am sorry but Damn Wal-Mart.
  • QuimZ, on 10/12/2007, -1/+1I've heard more ignorant baseless comments in this little thread than I have in a long time.. Get your ***** straight you morons, Everyone knows what a ***** macintosh is...Making fun of people who shop at Wal Mart is probably the most redundant thing I've seen on here, because I know that at LEAST 95% shop at ***** Wal Mart at least once a month. If you don't you're either A.) a ***** liar or B.) not very close to a Wal Mart. C.) rich and have someone shop at Wal Mart FOR you.

    You mac people post wild ***** has Wal Mart met it's match? LOLOLOLOL Even better, I knew I was opening a can of worms when I saw that *****....Somehow I wish there was a way for your comments to look they were written in CRAYON, because that way, I wouldn't be surprised when I read something idiotic.
  • Vermifax, on 10/12/2007, -1/+1Bal-Fart....pfffft.
  • ruprickt, on 10/12/2007, -0/+0I hate the red states so I shop at walmart. Thanks walmart for screwing them good. I would way rather buy movies from Itunes than walmart. haha the spell checker doesnt know how to spell walmart or itunes.
  • sdtek1, on 10/12/2007, -0/+1Check an article written on applexnet. They ask some interesting questions.

    http://www.apple-x.net/node/445
  • roto31, on 10/12/2007, -0/+1Has Wal-Mart met it's match. I belive they have. The only reason thay are doing this because they are scared. They know the movie download service will really eat into their business as a movie seller. The iTunes store is eating their dowmload store for breakfast on a daily basis. One thing about Wal-Mart is if they control a specific area of a market they will try to leverage out any competition who trys to get their way in. At one time they were one of the largest CD resellers but they didn't try to do anything about the iTunes music store when it was first started because why should the worlds largest retailer worry about such a niche market. Now fastforward to today. The realm of digital music dowmloads is a major player in the industry. So it makes sense now for Wal-Mart to want to try and bullly movie studios into not working with Apple ro provide content becuase it will cut into their profits from movies they burn in house to begin with.
  •  

    Login or register to add a comment

    Create a new account or login to join in the conversation on Digg. You'll also be able to Digg stories to help promote things you like.


© Digg Inc. 2008 — Content posted by Digg users is dedicated to the public domain.
DIGG, DIGG IT, DUGG, DIGG THIS, Digg graphics, logos, designs, page headers, button icons, scripts, and other service names are the trademarks of Digg Inc.