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The New Movie Battle Ground: Apple Vs. Wal-Mart
Wednesday, August 30th, 2006 at 3:00 PM - by Jeff Gamet
The next big battle ground in the digital entertainment download market is feature length movies, and Wal-Mart isn't exactly excited that Apple is gearing up for battle. According to BusinessWeek, the discount retailer is trying to get movie studios to reduce the wholesale price it pays for DVDs so that it can match the expected cost at the iTunes Music Store.
Apple hasn't launched a movie download service yet, but industry analysts expect that could happen as early as mid-September. And when it does, Wal-Mart wants to be ready.
BusinessWeek reports that Disney has signed on to offer movies through the iTunes Music Store, and Lions Gate said that it is on board, too. Other studios may have signed up by now, but Wal-Mart may be responsible for delays in getting them to sign on the dotted line. The retailer will be responsible for about 40 percent of the DVD movie sales for 2006, and that may have left some studios hesitant to work with Apple. Making Wal-Mart unhappy could translate into a substantial number of lost sales.
In one incident earlier this year, Wal-Mart flexed its muscles when the company threatened not to sell High School Musical when Disney initially released it as an iTunes Music Store exclusive.
The company also wants marketing help from the studios when it launches its own movie download service to compete with Apple, AOL, and other online services.
Wal-Mart's concerns over Apple's entrance into the move download market are well founded. The iTunes Music Store accounts for the majority of legal music and video downloads, and the iPod is the dominant media player on the market. Combined they make a powerhouse that other products are hard pressed to compete with.
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