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Wal-Mart Joins Video Download Party

Wal-Mart launched a new video download service today, putting the company in direct competition with Apple and its iTunes store.

Wal-Mart's beta service includes more than 3,000 movie and TV titles for view on PCs, laptops and portable media players. All the major studios are on board and new movie releases will be available for video download on the day of the DVD release. The price for new movies ranges from $12.88 to $19.88. Catalog titles cost $7.50. TV shows cost $1.96 per episode.

In a statement, Wal-Mart said it will allow customers to purchase the physical DVD and have the option of downloading the same title for a small additional price to use on portable devices and PCs.

Usually it's bad news when a Wal-Mart opens on your block, but Forrester Research analyst James McQuivey told internetnews.com he thinks Apple CEO Steve Jobs just caught a lucky break.

McQuivey said Apple's biggest struggle in selling movies on iTunes has been getting studios beyond Paramount and Disney to participate in the online store.

He said other studios have been reluctant to participate due to fear of a Wal-Mart reprisal. The chain represents a large percentage of Hollywood's multi-billion dollar DVD business. If a studio agreed to sell movies on iTunes at a price too low for Wal-Mart's taste, that studio might suddenly find its movies removed from Wal-Mart's shelves.

"But now that Wal-Mart's negotiated a deal with terms it finds favorable, studios can go out there and do deals with anybody else," McQuivey said. He expects the rest of the major studios to follow Disney and Paramount onto iTunes in the next six months.

Wal-Mart's beta service is powered by new technology from HP Video Merchant Services. The movie connection tool allows customers to discover new movies through the visual connections between actors and directors across a complete catalog of films.

But neither the movie connection tool nor Wal-Mart's video download service are navigable with Firefox version 2.0.0.1.

A Wal-Mart spokesperson could not be reached for comment by press time.