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.