Today's edition of 'yes they did/no they didn't' is brought to you by Wal-Mart, the New York Post and Reuters. As we knew, Wal-Mart is the largest DVD retailer (at least in America), with 40% of the market. Obviously, a player with that large of a stake in the game might not be too happy when a music download service with as much momentum as the iTunes Store announces movie downloads, and the New York Post printed a piece confirming just as much. According to the Post, Wal-Mart returned "cases and cases" of DVDs to Disney after suffering a panic attack over word of the iTS. Never one to stop at throwing product back in just one client's face, Wal-Mart then went on to throw a temper tantrum at the Hollywood studios, "overtly threatened to retaliate" by ordering fewer movies if they shook hands with the iTS. One has to wonder what happens when Wal-Mart doesn't get ice cream for desert.On the other side of this coin, however, Reuters printed comments from a Wal-Mart spokeswoman, saying "we are not dissuading studios from conducting business with other providers." Setting aside the discussion of who competition truly benefits, a Disney spokeswoman also stated she was not familiar with the NYP claims, though Reuters failed to mention whether this spokeswoman has anything to do with the shipping department.
It's a twisted web these players are weaving, and we'll (do our best to) stay on top of who's saying what.
[via Engadget]
Reader Comments (Page 1 of 1)
9-24-2006 @ 1:06PM
Liquidmark said...
Striaght up, Screw Wal-Mart.
They don't want competition? Welll, that's too bad. They got some now. Hopefully their tantrum pushed studios into Apple's capable hands.
After all, Digital sales are more profitable than Disc sales. The supplier doesn't have to spend a dime on materials to make the disks and cases.
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9-24-2006 @ 1:35PM
James Donevan said...
You haven't quite grasped the story. WalMart returned cases of DVDs last year after recognising the impact the iTS sales of TV shows were having on product sales. (Disney of course owns ABC whose TV shows were the original iTS releases). It wasn't as a result of the new movie service. This year they are trying a different tactic and are threatening "serious ramifications" before other studios sign onto the service.
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9-24-2006 @ 2:11PM
Richard said...
I don't know who wal*mart thinks they are kidding. People aren't going to stop buying DVDs just because wal*mart doesn't stock them. DVDs aren't a comodity like choolate. A Lost DVD might cost the same as a Stargate DVD, but you can bet the Stargate one is worth a lot more to me than the Lost one. So if Wal*mart stops stocking Stargate because they don't like the studio...I'll simply buy the same DVD elsewhere.
Again, Wal*mart has basically no leverage here. If they send back DVDs, or refuse to stock certain studios, the only loosers will be them.
(and yes, I realise that in reality its the Lost DVD that wal*mart won't stock, but that doesn't work for me because I think Lost is trash)
Of course, none of this is relavant to me, because we don't have wal*marts where i live (Australia)
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9-24-2006 @ 2:40PM
Jon said...
I'd think places like Amazon were more competition to Walmart than iTS because they are selling DVDs like Walmart is, whereas iTS is selling digital downloads. I know that downloaded movies aren't for everyone, and so Walmart/Amazon will still earn sales based on this. If iTS puts its prices down, it won't make as much of a difference to Walmart's sales as Amazon lowering its prices.
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9-24-2006 @ 7:29PM
PaperQueen said...
Color me awful, but as an independent retailer who has spent the past 12 years dealing with big box stores slashing prices on lines we used to carry, I’m taking great pleasure in watching THEM chase their tails for a change.
Doesn’t feel so good, now does it, Wal-Mart?
Bummer baby. Now, get over it.
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9-24-2006 @ 7:48PM
doug said...
Wal-Mart routinely sends back overstock/deleted titles on a weekly basis. Most of the movies are drop shipped to the stores. They aren't stored in a Wal-Mart warehouse somewhere. It would be extremely hard for Wal-Mart to organize all 3000 of its stores to pull the Disney titles and ship mass quantities back just for spite. They can barely get the weekly stuff done now, and that is with 3rd party help.
While I would believe they threatened the studios, I doubt they sent anything back.
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9-24-2006 @ 10:17PM
Dan said...
The Wal-Mart bashing is so tiresome. Wal-Mart is just like Apple or any other company. They have to meet the market where it is. They can forestall changes, but they can't stop them. NOTHING they do will prevent digital distribution. They might be able to slow it down for a few months, but when movie studios see how much money Disney is making with ITs, with virtually no cost overhead, they'll come around, just like the TV guys did.
I don't dislike Wal-Mart, but I believed they have reached the apex of their influence in the US, and they will be superceded by nimbler, smarter players.
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9-24-2006 @ 11:10PM
Tony said...
@Dan,
I guess you missed the PBS Frontline special on Wal-Mart...They're NOT like any other company. They're bullies that force companies to do what they (Wal-Mart) wants. They've strong-armed companies many times (just ask Rubbermaid) and they stop at nothing to get what they want. Ruthless.
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9-25-2006 @ 12:39AM
roberto said...
So, Walmart would not sell Disney to spite Apple? Let's see 'em explain that loss of revenue to the shareholders ... I sure that they want to set up their own download site too, but that playing field will be level or tilted against their favor so they'll only lose. Excuse me .... can't type .... my eyes are tearing up ....
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9-25-2006 @ 4:07AM
Peter Payne said...
Remember back when The Wherehouse (it was a retailer that used to sell music CDs, a disc that contained music stored in digital form) started selling used CDs. And rememebr how the CD industry retaliated by raising prices. And remember how they got in big trouble with the Feds for this? Course, that was back during the era of the U.S. two-party system, so who knows that would happen now.
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9-25-2006 @ 10:41AM
Gordon Werner said...
Walmart ... single-handedly destroying America ... destroying small-businesses, towns, the US Manufacturing base ...
and now helping build container ports in Mexico to avoid the labor costs of landing their goods at the port of LA or Long Beach ...
Screw them and anybody who shops there
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9-25-2006 @ 7:43PM
iRusty said...
This is just one of the many reasons that I don't shop at Wal-Mart. When it comes to anything, be it CDs, DVDs, clothes, groceries, whatever...I always go to Target. Wal-Mart is a corrupt, controlling super-monopoly and this is incident is just one more fan on the flames. I hope that Wal-Mart does not succeed in swaying the movie studios in their iTS decisions, because I would much rather download a movie from Apple than set foot in a Wal-Mart again.
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9-25-2006 @ 9:46PM
sjmills said...
Why are they worrying about competition from iTS? The hicks that shop at WalMart certainly aren't smart enough to work a computer, much less download a movie and then figure out how to watch it. And if they do somehow figure out how to do it, they'll be constantly interrupted by all the viral activity and security updates going on in their $73 crappy PC they bought from WalMart.
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9-25-2006 @ 9:46PM
sjmills said...
Dan,
I guess you also missed the story about WalMart forcing Vlasic to sell a freaking gallon of pickles for less than $3, which pretty much screwed up Vlasic. Go read about it. WalMart does indeed suck if you have to do business with them.
http://www.fastcompany.com/online/77/walmart.html
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9-26-2006 @ 6:09PM
Daniel said...
I do business at Wal-Mart all the time and it never sucks. I get everything at a low price. This is particularly true of DVDs. I can buy movies for less than Gamestop sells them used. Plus, I work there part time (which doesn't pay too poorly at all after awhile), so I get them at 10% less. And if Rubbermaid or Vlasic can't meet the low prices required to sell at Wal-Mart, then they can go elsewhere and sell their products to consumers who want to pay more for the same thing.
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