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.
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