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Did Wal-Mart threaten Hollywood over Apple?

Written by James Delahunty (Google+) @ 25 Sep 2006 7:19 User comments (25)

Did Wal-Mart threaten Hollywood over Apple? An article published by the NY Post has caused quite a stir in the movie business. It claimed that the retail giant Wal-Mart has threatened to retaliate against major Hollywood studios who make deals to sell movies through Apple's iTunes service. "Wal-Mart has overtly threatened to retaliate if they go into business with Apple," NY Post's Tim Arango wrote.
He cited an anonymous source as saying that Wal-Mart's David Porter "threatened to hurt us in terms of buying less products." Major Hollywood movie studios depend on Wal-Mart to sell about $5 billion of DVDs during the fourth quarter. When Apple first began to offer TV shows which included Lost and Desperate Housewives, Wal-Mart sent back "cases and cases" of DVDs to Disney according to the source.

However, Wal-Mart was quick to distance itself from the NY Post article by releasing a statement to that effect. "Customers want to watch movies and they want to be able to make the choice when and how they want to view them. While we recognize there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers," a Wal-Mart spokesperson told Reuters.

Reuters also quotes an anonymous source as saying Wal-Mart isn't worried about Apple's offerings as it sees it as niche and catering mainly just to young single men. "I don't think Wal-Mart or Target or any of the big box retailers are nervous," the source said, "because we have had almost a year of learning and development, and it has proven not to be that threatening."

NY Post
Ars Technica

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25 user comments

125.9.2006 8:39

Yeah like this is a surprise, Walmart is one of the most evil companies on the planet.

225.9.2006 9:13

So is Apple with their DRM.

325.9.2006 9:22

wal mart is saying if you sell your movies online.. i wont sell them in my store... correct? i don't get this

425.9.2006 9:33 A few of the family members are some of the world's richest people simply from either their inheritance or else which doesn't actually involve any work on their part. I say screw Wal-Mart! It's not like they're the only ones selling movies...

525.9.2006 9:39

wal mart is saying if you sell your movies online.. i wont sell them in my store... correct? i don't get this
Basically if this is true, they beliueve that an on;line distribution of movies is in fact a quicker way for consumers to buy movies. There is also a price difference which I didn't mention in the article. If it's true then Wal-Mart would be scared that more and more customers would mjove towards downloading their movies without leaving their homes than buying the DVDs from Wal-Mart. While most people would probably prefer to buy "new" movies on DVD, you have to remember the old titles. Let's say you are at home and you think of an older movie you'd quite like to own. Wal-Mart might be where you'd stop to buy it but if you have access to that movie in a fast download from Apple, you might just pick that choice instead. But ye.......... its all about profit.

625.9.2006 10:16

If the movie studios were smart they'd already be selling movies online, not everybody lives close to a Wal Mart/Target/etc and even if they do, a lot of people would rather get it now (and I'm presuming movie downloads through apple would be cheaper) than drive to a store to get it.

725.9.2006 13:54

Go Wal-Mart.

825.9.2006 15:45

Wal-Mart's movies suck anyways. I hardly buy any DVDs from there because most of their inventory is full screen. Don't these stupid idiots realise that widescreen is the preferred format among most DVD buyers? I usually go to Best Buy to get my DVDs.

925.9.2006 18:12

DakotaFan (Senior Member) 25 September 2006 19:45 Wal-Mart's movies suck anyways. I hardly buy any DVDs from there because most of their inventory is full screen. Don't these stupid idiots realise that widescreen is the preferred format among most DVD buyers? I usually go to Best Buy to get my DVDs.
Huh? I buy most of my new movies from WM and I always buy WS.

1025.9.2006 21:18

If it is truly true that Walmart threatened movie companies over selling movies through I-Tunes, Walmart could be looking at a SERIOUS federal investigation into them. It would be the equivalent of blackmail, and that is illegal whether it is a corporation doing it or a private citizen doing it.

1126.9.2006 5:05

if walmart wants to get back at apple then they need to carry some of those cheap nano knock-offs from Korea with the amount of stores they have the buying power must be great and the distrobution would be world wide.... this would hit apple in the money maker... and that would send a clear message that walmart has had enough... also the sale of dvds through a secondary market such as Itunes only shows that there really has been a market and that the webbase downloading of movies has been a viable format to increase revenues for hollywood. but understanding that walmart puts money out to buy these dvds and that they have to wait for their return in sales of each item only shows how strong of a market the downloading of movies can be. it only shows that p2p's had it right all along if it can be downloaded people will and have for years. And "now" that there is a legail way to do it they should drop all the old lawsuets due to hollywoods inability to do it befor. if you get caught now after there is a leagle way to do it they should throw the book at those they catch. and forgive those who may have commited any wrong doings befor.

1226.9.2006 10:22

way to go wal-mart

1326.9.2006 13:24

Walmart sells movies?

1426.9.2006 13:27

Walmart is making way too hard on themselves. If they REALLY want to get Apple, all they have to do is open a Walmart near Steve Job's house. The rumbling sounds from the obesity going back and forth all day will be enough for him to stop selling movies. Add the diaper smells, and he may even go to work for Microsoft.

1526.9.2006 22:39

Why doesn't walmart get more into online services already? That's what they should do.
Get their own movie download service and make it cheaper than itunes.

1627.9.2006 4:12

Chris1000 oh please the feds wil waste 50grand investagteing them then slap them on the back and say good try spot good try!

1727.9.2006 11:01

Wal-Mart may or may not be trying to threaten them. And Wal-Mart is big enough to really hurt the industry, because of how much revenue they generate. Hollywood will have to decide whether they feel that the revenue available online will match the $5 billion that can be generated by Apple. As far as shipping back 'cases and cases' of Disney DVDs, that's nothing to sneeze at. As a corporation, Wal-Mart ships 'cases and cases' back to several distributors regularly. A specualtion like this is about as good as: "A wide range of responses have been felt throughout the US, in relation to the films 'Farenheit 9/11' and 'Farenhype 9/11'. Both films cover different ends of respective political opinions. Blockbuster might be threatening Hollywood to stop producing these films, by having employees physically crack DVDs in half, to make sure they are not used." Before going any further, Blockbuster does physcially, and deliberately destroy DVDs on a regular basis. This is fact. It's due to an agreement they have with various studios. It is classic speculative reporting, to point out to completely unrelated subjects, and make them [italic]feel[/italic] connected like this. I'm sure Wal-Mart did send 'cases and cases' back to Disney. But something like this is standard, happens regularly, and has no relation. When you're a company as big as Wal-Mart, removing any item that isn't selling generates cases and cases. Looking at how many low-budget DVDs Disney makes, tv episodes, etc. It's not surprising that this happens. Now, if the news report said that in response Wal-Mart started shipping cases and cases of shows that are on apple's download service..... Then I might have actually been ignorant enough to not notice the lack of a connection. This is poor reporting on part of Tim Arango of the NY Post. Hopefully, he gets repremanded for publishing this kind of low-grade speculation.

1827.9.2006 13:28

Wal-Mart to sell about $5 billion of DVDs during the fourth quarter
Like it or not they are one of the bussiness that sell most of the movies from hollywood, so they either win or hollywood will lose $$$$$

1927.9.2006 16:59

Walmart should get a gang of their sweatshop kids to go slap Steve. Seriously, When is enough, enough? Walmart isn't big enough already. I'm fed up with these multi-billion dollar neighborhood wreckers whining everytime they think they don't have a hand in every single pie in the world. Instead of crying and threatning people, maybe the CEO should take a year off and help Bill Gates in his causes. I hate Walmart!

2027.9.2006 17:17

Quote: -------------------------------------------------------------------------------- Wal-Mart to sell about $5 billion of DVDs during the fourth quarter -------------------------------------------------------------------------------- Figuring a very rough estimate of $8 a movie. You're saying Walmart will sell 625 million DVD's in a 3 month period or 6.9 million a day or 289 thousand an hour or almost 5000 a minute or 80 DVD's every second, 24 hours a day for 3 months?????????? With Sams, Walmart, Super Centers and Neighborhood Markets, they have 3931 total stores + their online business. Which equates to the equivilent of each store selling 1,766 DVD's 7 days a week for 3 months straight, minus whatever they sell online. Can you site the reference? Cause that's too fantastic to believe.

2128.9.2006 5:15

@ChiefBrdy Very interesting... I guess companies tend to exaggerate when trying to make a point.

2228.9.2006 6:09

Nick600 and we see further examples of their exaggerating when they whine about the billions they lose counting every "might be sold" copy >>

2328.9.2006 6:56

The majority of films are not sold that low, and newer title tend to reap higher profit margins.

And yes, the 5 billion is still a great exagguration on Hollywood's part. But they've been known for that when 'counting statistical estimated losses from piracy' too. So, no real surprise there.

This message has been edited since its posting. Latest edit was made on 28 Sep 2006 @ 6:58

2428.9.2006 7:36

I think that walmart should be worried and many other outlets if the companies offering online movie distribution and the MPAA can get it's act together. Can you imgaine if Itunes or Amazon offers movies that is transferable and convertable to many other devices with very little limitations only 2months or so after being released in theatre's. I think that more and more companies want to do this because they can make more money by also releasing exclusive content and downloadable extra content like additional scences, and other features.

2528.9.2006 7:58

I'm really not sure where you brought the MPAA into this, as they are just the company that gives films their ratings, and nothing else. They may be 'called' the Motion Picture Association of America, but ratings is the extent of their power. And besides, it's not up to the M.A.F.I.A.A. how iTunes, etc deliver their films. When a film studio agrees to let their product be transmitted over certain services with certain encryptions, then they're stuck with that. Hollywoods lawyers can no more sure over iTunes films than the RIAA can sue over iTunes music. There is an agreed contract in place, and if they don't feel there is adequate protection, it is up to the studios themselves to stop supplying new content to these distributors, or to make tighter contracts requiring higher encryption in the future; but once they agree to a distribution method in a written contract with these companies, it's set in stone. It's not a matter of anybody 'setting iTunes and Yahoo right' it's a matter of studios themselves that feel they are losing money, who need to demand better protection, before agreeing to give more content for distribution. If the studios aren't ready to stand up and do that, then every dollar they lose only stands to serve them right. As for places like wal-mart being scared of online distribution.... Good. Because the old ways are becoming just that... Old. It seems that physical copies will be gone in five to ten years, the way things are going; I can only hope (I'm tired of the need for three folders to hold 800 DVDs, I'm a slight movie nut).

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