“Wal-Mart also used its significant clout to launch its online store with films from all major studios. The Bentonville, Ark., retailer accounts for about 40 percent of DVD sales, and studio have been careful not to anger their largest customer… Given Wal-Mart’s importance, the studios readily agreed to sell films on the retailer’s new site, analysts said.”
That quote was pulled from today’s Globe And Mail article, Wal-Mart Launches Digital Movie Download Store, by Gary Gentile and it is huge news for online marketers.
What you’ll quickly learn in reading this article is the many challenges that Apple and iTunes have faced in getting movie studios to agree to this format and the technology hurdles that still have to be overcome by the consumer for this type of business to work. That being said, check this stat out:
“Internet downloaded is expected to generate about $4-billion in annual revenue in fives years, compared with an estimated $27-billion from DVD rentals and sales, according to Adams Media Research.”
The main reason marketers need to wake up to this new channel is that we’re talking about Wal-Mart and they control the majority of any form of sales when it comes to movies. They’re coming into the market competitively priced (a little less than iTunes) and they plan on leveraging everything they can to make this work.
Marketers need to love this because we’re leaving the Netflix model of having a physical piece of plastic to deal with. Marketers need to hate this because the digital downloads can’t be transferred to a DVD and can only be played on a PC (which can be transferred to a Windows Media-compatible player – according to the news item). The Wal-Mart digital downloads will not play on Apple Computers or iPods according to this article (my guess is someone’s got a hack for this issue).
We’re still in early-adopter phase, but the big companies are stepping it up. We can sit back and wait for the major companies to ask us Marketers how we can best market to these people who will be downloading films and porting them to mobile devices and vice-versa, or we can get proactive and start looking at new ways to create “advertising” for a group of people that can easily hit delete or the fast-forward button.
Personally, I’m encouraged by that challenge… and it’s the exact same one that we’re facing with Podcasting and Blogging as it exists today. Should we pumping these channels with advertising or should we be creating content as media?
The new Wal-Mart digital movie download site is still in beta and can be checked out here (it’s ultra buggy on my system as of this Blog posting): Wal-Mart Video Download Store.