Wednesday, January 2, 2008

Wal-Mart Stops Offering Video Downloads

How lucrative is the online video download business? At the same time that Apple inks a deal with Twentieth Century Fox to offer downloadable movies via iTunes, major retail force Wal-Mart has discontinued its movie download service.

U.S. customers who have already purchased videos from Wal-Mart's now defunct download site will still be able to play them back on the same computer they were downloaded using Windows Media Player. Movies purchased in the "Portable Format" will also still be able to be transferred to up to three compatible devices (the list of which does not include the iPod).

So what do you do if you want a movie now? Wal-Mart logically states in its FAQ section: "...We continue to sell today's most popular movies on DVD and in Blu-Ray, HD DVD, and UMD for PSP formats. To shop our wide selection of movies, please visit" In other words: downloadable movies no more!

Although I do believe that online videos are great, is there really a market for downloadable movies? It's great to be able to view a product demonstration in a way you never could through words; and online video is an excellent medium for entertainment, illustrating humorous and fun stuff like you'd often find via sites like YouTube. But for what reason would I want to download an entire movie?

I can imagine being on a flight, train, or long subway ride and catching up on quick news bytes, sitcoms, or funny trailers while I wait. I can equally imagine doing so while in a boring waiting room, or even while camping. But an entire movie? If I'm on a long flight, the airline will probably provide a movie anyway. Some airlines, like WestJet, even offer access to satellite TV!

Of course, there's always the option to playback the movie on the computer. But if I'm at home, why wouldn't I just watch the movie via DVD or on TV through an on-demand service or TiVo?

Even so, I might be out in left field on this one, since a recent study found that almost 30% of U.S. consumers are more likely to use broadband for TV than cable or satellite. Price is one main reason, which is especially critical when you think of dorm-room students who would rather pay one bill for TV and Internet then two separate ones. Watching movies would follow the same line of thinking: why watch cable or satellite TV, or buy a DVD, when I can download the content right on my PC? Then there's content: 42% of the survey respondents said there's a "lack of international news and information" on "regular" TV. If you're not going to use cable or satellite for TV, why use it for movies?

It seems, then, that there's a growing market divide when it comes to downloadable video, between those who are content watching mediocre-quality movies on a widescreen PC monitor; and those who want the full, high-definition experience, and will head out to rent or buy the DVD and all the required equipment in order to get it (or actually step foot into a movie theatre!) It'll be interesting to see how this pans out in the long-run.

Nevertheless, Apple has moved forward with movie downloading in the U.S.; while Wal-Mart has nixed the idea of downloadable movies altogether. With that said, I wouldn't be surprised to see tons of people catching a flick on their tiny iPod Videos or iPhones on my next plane ride. Perhaps it isn't so much the content as it is who's providing it and who their core audience is; not to mention what restrictions are attached to the content itself. (iPod users likely aren't phased if they're told they can only play back the movie on their iPod).

As for TV vs. broadband, the ongoing Writer's Guild strike has resulted in nothing but reality shows and repeats on TV as of late; and this certainly isn't helping to convince consumers that TV has something more to offer than the Internet. Hopefully with some sort of resolution reached, we'll see both TV broadcast and online video content ramped up to even more exciting proportions.

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