Thursday, August 31,2006 @ 9:05am
Wal-Mart, Apple spar for movie sales
Wal-Mart is displeased with the prospect of Apple taking a bite out of its movie sale business, reports BusinessWeek. The report says that Apple will launch the 'iTunes Movie Store' as soon as mid-September along with a new iPod. Wal-Mart has reportedly become so concerned for its business that it has threatened not to sell DVDs from companies which agree to sell on iTunes. The prospect of Wal-Mart not selling DVDs for Hollywood executives is a terrifying thought -- currently Wal-Mart accounts for 40 percent of DVD sales, about 17 billion dollars of the market. Earlier this year, Wal-Mart played out this move by initially refusing to sell Disney's "High School Musical" after it popped up on iTunes prior to Wal-Mart getting a chance to sell it. In addition, the report says that Apple only has Disney signed-on for iTunes movie sales--despite a comment from Lions Gate that it had a deal with iTunes already.
Reports indicate that Wal-Mart may be planning to enter the digital movie download scene soon, and may be threatening to stop DVD sales of any studio which refuses to promote Wal-Mart's online store. BusinessWeek also reveals that some executives throughout Hollywood are concerned about Apple dominance and ability to set a single price for all downloads, much as it has done with its music ($0.99 per song model).
BusinessWeek also speculates that both Comcast and Amazon.com are on the path to their own digital download services. Upon attempts by BusinessWeek to question all parties involved in this story, all refused to acknowledge their plans with the exception of Wal-Mart. It acknowledged that is was considering the possibility of digital downloads, but denied to using its retail leverage to threaten studios and distributors over movie sales.