Apple in Talks with Wal-Mart over Movies 176
Alex, Variety.com writes "If you can't beat 'em ... Apple and Wal-Mart are in discussions over an alliance that could allow the giant retailer to profit from iTunes video downloads. Apple would then gain access to titles from every major studio." From the article: "A deal could take the form of a digital download 'coupon' that would allow consumers to buy movies, TV shows or music on iTunes with Apple paying the retail giant a percentage of the proceeds, one industry insider said ... Hollywood has been closely watching Disney's relationship with Wal-Mart in the wake of the deal. When Wal-Mart caught wind of talks between the studios and Apple, it threatened to cut its order of 'High School Musical' over the summer. Disney CEO Bob Iger did the deal with Jobs anyway, and the rest of Hollywood has been watching to see if and when the other shoe drops."
Getting in bed with the devil... (Score:2, Insightful)
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I expect you'll still be able to boycott Wal-Mart, download music and support artists all at the same time.
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Also, I hope the amount they are getting is less than 5c for every dollar of vouchers sold. Otherwise I'm just going to have to go find an ASDA to petrol bomb.
Cunts.
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He does have some (Score:5, Funny)
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Actually, the CEO of Wal-Mart is H. Lee Scott, Jr.
I just hope Wal-Mart isn't corrupted by the pomaceous behemoth.
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Hardly appropriate (Score:3, Insightful)
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And for your completely laughable comment about Walmart launching their own service, I would like to remind you this is precisely what Walmart did when the iTunes Store started selling music. Do you know anyone who buys their Windows-only tracks at $.88 a piece from this service? If you do, I'll bet you know a
Jump in logic (Score:5, Insightful)
This is a huge jump in logic. It's assuming that the reason why Apple doesn't have access to these titles now is strictly because Wal-Mart is competing with iTunes. The fact remains Apple will still have to hack out distribution deals often on a per-title basis, and many of the studios don't want to offer most of their movies for download at all. It's got nothing to do with Wal-Mart.
All this deal would do is remove one of the smaller obstacles Apple faces in getting more films on iTunes (and my bet is Wal-Mart is probably the least of Apple's headaches). The big obstacles - copyright, DRM, distribution rights, contracts between various parties, etc. - would still remain.
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Re:Jump in logic (Score:5, Informative)
walmart has heavy handed tatics
something most people don't know is that the way walmart does supplier contracts is they place the order - it is delivered - they only pay for the product once it go out the door. While the items are sitting on the shelf or in the back room walmart has no money in them.. like wise when someone returns some thing it goes back to the supplier and walmart gets a credit for it.. so if they order 1000000 widgets and just let them sit in a warehouse for 3 months and then just send them back the suplier paid to make and ship 1000000 widgets and then 3 months later got them handed back to them and never say a dime while the whole time they have all their money on the line.
they break companies.. i have heard stories from people that work in their ware houses about how they will place orders and then when they arive hold them.. and wait then call the supplier back up and demand a reduction in the price or they will send them back because they don't feel it will sell well. at that point unless the supplier is huge they don't have much choice. The way walmart does their suppier contracts makes this all legeal - and they woln't use you if you don't accept the terms..
Only for BIG suppliers (Score:4, Interesting)
The suppliers are actually happy with the arrangement, because it's a deal point, and they can extract better pricing by working with that system. While I'm sure that Wal-mart has played hardball as you described, it's a little overstating to suggest that that is the normal way of doing business.
My friend also suggested that the buyers have been becoming less adversarial, and trying to produce more win-wins. Sure the Wal-mart culture is there... normally buyers get taken out to lunch with salesmen who entertain them... a bit of sneaky corruption, the buyers are pushed to gives a little bit of the company's money to get well treated by the salesmen. At Wal-mart, salesmen go to Wal-mart HQ, no meals are allowed. All negotiations take place in a small room at Wal-mart HQ. By keeping their buyers from trading favors with salesmen, they keep their costs down.
Walmart does MANY things... they are aggressive, but not necessary under-handed. However, they have a LOT of maneuvering room in the industry, and if they can make real money by selling Apple iTunes movies in the store, they WILL bring market pressure on the studios to play ball.
Alex
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Studios give WalMart a contract to distribute their movies...
WalMart gives iTunes a sub-contract to distribute those movies...
Saves a lot of trouble if that would work out.
OTOH, if WalMart comes to an agreement with iTunes & the studios aren't happy with it, you really think that the studios are going to lock out WalMart?
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Many of the studios don't want to offer most of their movies for download at all.
I know you're right, but could someone please explain to me why? On the one hand, you've got DVDs, which you need to physically make hundreds of thousands of copies of, then ship them to stores, hope none of them break in the post, hope none of them get sent back because they weren't bought, and hope no one circumvents the easy-to-bypass encryption of them.
On the other hand, there's iTunes downloads, with slightly harder
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Once it becomes easy to distribute movies, why do you need the studios again?
Um, to make the movies, perhaps? With some imagination, some guide books and a lot of hard work and practice, anyone can write a novel or produce an album, but making a film requires a whole group of people who all know what they're doing, plus expensive equipment to do it with. Maybe eventually films will mostly be made by amateur groups of people, but it'll be a while after books and albums end up that way.
Not that huge (Score:2)
That is not correct. The answer is subtly, but importantly, different - it is because Walmart is threatening studios that if they offer downloads through ITMS they will cut off sales.
It's not because Walmart is competing, it's because Walmart threatens NOT to compete and reduce the market availiable to studios!
many of the studios don't want to o
Not sure this means what I think it means (Score:5, Interesting)
Re:Not sure this means what I think it means (Score:4, Insightful)
Re:Not sure this means what I think it means (Score:5, Insightful)
Digital downloads are the ultimate in impulse purchases. Say, for example, you're sitting at home on a weeknight, there's nothing on TV, and you have too much time on your hands before bed. Do you:
a) Get dressed, get in your car, drive to Wal-mart, purchase a DVD, wait in the checkout line, drive home, and pop it in the DVD player; or
b) Open iTunes, browse the movie/TV selections, download and watch your movie/TV Show
If you've got broadband, "b" is almost always preferential. Option "a" is just too much of a hassle, and the store may be closed anyway. (Especially for those poor late shift workers.) The only thing that holds consumers back on making that sort of purchase is price. No matter what studios think, a digital download does not have as much intrinsic value as a packaged Disc. Which means that if the consumer feels that the digital price is too close to the price of the physical copy, they're not going to spend the money. While studios may think this means that the consumer will go purchase the DVD, more likely it means that they'll purchase NOTHING.
If they wanted the movie bad enough to get a DVD, they would have gotten a DVD rather than a digital download. DVDs have more value as "keepsake" items due to their special features and permanent, physical storage. Thus digital downloads will be likely to complement DVD sales rather than usurp them. Which means that Walmart should keep carrying Batman Begins, but they can drop Ultraviolet.
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I love the instant gratification of iTunes Music Store (deadly on the bank account when combined with a laptop, home wireless network and The Alternative on VH-1 Classic...), but I don't think the experience is the same when your downloads are 4x the size.
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Why is it that people keep telling me that it's impossible to do what I've already been doing for weeks?!?
Listen, I've already watched:
- Aquaman
- The entire, currently available season of Eureka (10 episodes as of last night)
- Heros
- Various BSG freebies
Each time I've been able to start watching within moments of starting the download. So please, people; STOP TELLING ME I
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It's only possible if you are willing to tolerate certain
inevitable engineering tradeoffs. If I'm going to PAY for
something I am certainly not going to tolerate anything less
than crystal clarity 720x480 on a 60" screeen.
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The way I see it, I can either PAY Comcast comtastic rates (what's that sucking sound?) to watch a few shows and movies I like in (OOoooo!) 480p, or I can PAY Apple less money to watch the same shows and movies in 480p at more acceptable, ala carte rates.
I'm pretty sure Joe Average is thinking the same thing. Ask your average man on the street what the difference is between 480i a
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c) Go to the on-demand service provided by my cable company, choose a movie, and start watching it immediately.
I choose "C".
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You *do* realize that on-demand is Option B, right? Just because it's a different service doesn't mean that it's not a digital download.
Not just price (Score:2)
The only thing that holds consumers back on making that sort of purchase is price.
Uhh... I don't know where you live, but around here I don't have a reliable 10Mbps/s stream to download a DVD quality movie and watch it while it downloads. If I have to wait 2+ hours for the damn thing to download it isn't much of an "impule purchase" is it? I could drive to the blockbuster and be back in 1/8 that time.
Before the retail channel will be a success, the national infrastructure has to be in place. And all downl
Perceived value (Score:2)
No matter what studios think, a digital download does not have as much intrinsic value as a packaged Disc.
I'm sure the studios realise this, the same way they realise DVDs look more "filmey" if you put them in a box the same height as a VHS tape, and the same way they realise someone won't pay twice as much for two films on a single disc. It's not about the bitrate, or how much will fit into a given physical space, it's about psychology.
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BZZT. Try again. I start watching iTunes downloads within seconds of the download starting. There's usually enough bandwith for full streaming.
You don't really think that Apple is sending MPEG-2
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DVD quality movie with NO special features. Make it 2G for all the extras.
Then you have to worry about your ISP and what their bandwidth cap
policies are. An 8G monthly limit is not unusual.
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300MB is for a 45 minute feature. An hour and a half feature is 600MB. That puts the stream rate at somewhere around 900MB/s, which isn't all that bad for an MPEG-4 video. The key issue is the encoder, and how well it avoids artifacting. From what I've seen so far, I'm quite pleased. I wouldn't recommend projecting it onto a 7 foot screen, but it looks more than acceptable on a computer monitor.
No one is twisting your arm to purchase these vid
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Traditionally, that's been true. However, Apple has already got iTunes on people's desktops, AND they have managed to make the movie download one of the most painless processes I've ever seen. It literally works as smooth as their music downloads, only you can start watching while it's downloading.
In addition, Apple is nailing customers in two other ways. The first is the Video iPod for people who want to carr
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At 80k/sec, you'd have to wait 20 minutes before you can start streaming. It does take more than 1 hour to download the 300MB file.
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You make money (the wal mart and ipod way) by selling to the masses. Do you think the average DVD consumer knows how to rip and encode their dvds? Do you think that everyone, even if they have the time and ability, will want to go that route???
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Thats actually a great incentive (Score:2)
Amazon.com has me somewhat salvating. Prices are still decent but from the file specifications that quality might be much higher.
If you can't beat 'em? (Score:4, Insightful)
Seems to me that they're just looking to a different channel to market their product since the first channel wasn't interested.
Sweet deal! (Score:5, Funny)
Note to self: sue everyone!
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In a honest administration, Wal-Mart should worry (Score:5, Insightful)
Its perfectly legal and valid for Wal-Mart to squeeze its suppliers when they sell to Wal-Mart, but to threaten suppliers because they are selling through other venues, when Wal-Mart has an unquestioned monopoly in many areas, would be asking for intervention.
However, with the current DoJ completely toothless, and prefering Seattlements (eg, the Microsoft anti-trust resolution) to actually going after entrenched business interests (especially hard-core republican supporters like the Waltons), Wal-Mart doesn't need to worry.
Re:In a honest administration, Wal-Mart should wor (Score:5, Insightful)
Got a lot of friends who've been working for Wal-Mart for years and have been getting the shaft the whole time. Wal-Mart does not care about its employees or suppliers. I work in the health-care industry, particularaly with insurance providers. Wal-Mart contracts through Blue Cross of Illinois for benefits of their 'full-time' work force. (Meaning 40 hours a week, but they won't pay you overtime if you work 60 one week and 20 the next). You want a bad benifit package, ask a Wal-Mart employee. The government offers far better insurance for people below the poverty line and for much cheaper. And your average full-time (non-manager) Wal-Mart employee is at poverty-level income.
re: Wal-Mart and employment (Score:2)
Ultimately, no business can continue offering poor pay and benefits and survive, unless people keep on signing up to work at those poor wages.
I mean, I get why Wal-Mart might have initially gotten away wit
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I am sure that if these people could get jobs elsewhere (k-mart, target or any other place) they would. But they cant.
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Another reason they don't leave is becuase all the other r
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When you look at it that way, it seems like a bad idea to complain that they should pay their workers more! Why reward apathy? People always have "other choices", really. They just don't have other choices they're willing to put forth th
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There is no `essence` in sporting goods, cheap furniture, mass produced DVDs, diapers, and toilet paper.
If you want nice furniture that has `essence`, go to Robb and Stucky or some guy that builds chairs in his garage; but then you'll bitch about the high prices.
I will say that I am surprised that Wilson still has a lot of `hands-on` in the process of making tennis balls.
Wal-Mart provides goods that are `good enough` for the people that shop there.
I s
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I can understand the bias against Wal-Mart in stories like that but I'm sure there is another side as I've seen in local economies more recently in the dot com boom.
How much of that is Rubbermaids arrogance and sticking to a high price to keep inflated salaries?
If Vendor B can provide the same garbage can from the same plastic supplier and for 60% less, is it really the fault of Wal-Mart?
I've witnes
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Hmmm (Score:2)
Whatever one things of Wal-Mart, they aren't run by idiots. If the on-line distribution of video is going to happen in the future, and surely it is, it would be in their best interest to get in on the ground floor with the best (ie most proven, most popular, and
Freaking Christ. (Score:4, Insightful)
Is this premature? (Score:5, Interesting)
If I were in Apple's place, I think I'd wait a while before giving in to any major retailer. On the other hand, I don't know how gift cards sold at retailers work -- if everyone else who sells an iTunes gift card gets some cut off the top of the cost of the card, then I don't see any issue letting Wal-Mart play in that game, too (which, according to the article, they don't at present).
Didn't a lot of studios initially balk at the idea of TV over iTunes, fearing it'd hurt DVD sales? Somehow I think that movies would go the same way, with initial reluctance, phenomenal sales of the initial Disney titles, growing acceptance, and finally becoming just another standard sales channel.
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In my book that accounts to weekly sales of roughly $131mm
$131mm=40%*$17bn/52
I think Wal-Mart wouldn't give a fart even if iTunes sold $10MM worth of movies in the first week.
Money is Hollywood's lifeline, and cutting a weekly flow of $130MM sound's pretty life threatning to me
WIll not stop people buying DVD's (Score:2)
But here's the real question - if WalMart stopped selling DVD's, would people stop buying DVD's or simply go over to Best Buy which is generally right next door? WalMart does not exist in a vaccuum.
That's the truth of the matter, WalMart not selling DVD's just means WalMart is out $17bn in sales! It doesn't mean the studios are. Your figures are powerful proof of the original point, that the studios can blow off WalMart on this one. It's never good
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I didn't mean to say that Apple would be a serious threat to Wal-Mart. [on the other hand, if Wal-Mart really doesn't give a fart, why are they trying to persuade studios not to sell movies through iTunes?]
What I was trying to say was that, a single studio, selling like 40 titles or so (I forget the count) sold over $1 million of just those few titles in a single week. That's $25,000 per title. Netflix' home
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Studios aren't likely to all move to Itunes in one swift movement, they will do so gradually like the Networks did for TV shows.
Where Wal-Mart has leverage is that they can scare the Studios and slow down the adoption, or even kill itunes movies in its infancy.
WalMart would never cut itself from $6.8bn of DVD sales just because they are angry. However, just like
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> Of course they do -- [...] you thought they just carried & sold the cards as a favor?
No, not really, but since I've never seen a wholesale invoice for iTunes or other gift cards, I chose to speak non-authoritatively.
cringley (Score:3, Interesting)
The success of Apple's movie download business right now depends mainly on not alienating Wal-Mart.
So for the moment Apple tells Wal-Mart that movies sold through the iTunes Store won't be a threat because of their lower than DVD
resolution. When that fails, Apple will point out that HD-DVD and Blu-ray are coming and Wal-Mart should stop worrying. But
eventually Apple will succumb to its need to sell yet more iPods and will point out that its little gizmo is a fine substitute
for an optical disc. Take your iPod to Target and fill it with movies. Or, better still, buy an iPod at Target and THEN fill it
with movies. Remember that in the end this is all about selling more razors, not more blades, so movie sales don't really matter much to Apple as long as iPods are flying off the shelves.
2 Things (Score:2, Interesting)
First of all, just let me buy something online via a download without any digital coupons or anything like that. A novel concept would be that I would go to a website, pick a movie and download it. It's pretty complicated, granted, but I think it could be implemented. But that's neither here nor there...
Secondly, and completely unrelatedly, from TFA:
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So pretty much I would like to be able to buy movies in the same way that I rent pay per view/onDemand movies now.
I always thought that by now, 6 years into the new millenium, we would hav
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1)Actually selling it cheaper then you bought it for
2)Selling it cheaper then it cost to put on the shelve(that wholesale + cost to stock)
3)Selling it for less then they could be, Meaning thenprice point for selling it is 19.99, you sell it for 12.99. even though they may pay 5 dollars for it.
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Wholesale cost of a new release DVD to a retailer like Wal-Mart is typically about $17.95 [216.239.51.104]. So yes, they're paying more than $12.99 per movie, that's what a loss leader is. The idea is that by s
Apple has a lot to gain.... (Score:5, Insightful)
1. Walmart sells a boatload of iPods. Apple probably wants to keep Microsoft out of the game... Given Walmart's purchasing power, Steve will insist on two things: a)squeeze Microsoft on cost margins further exacerbating Zune's losses b)iPod gets premium shelf spacing other players including Samsung and Microsoft get stored in the back c)iPod accessories get better placement (taking it further perhaps extending Apple's store within a store concept from CompUSA to Walmart d)leverage for margin negotiations over iPod sales
2. Fairplay.... Walmart does not take backstabbing lightly. Microsoft's strategy to drop PFS (remember Walmarts 88cent store is based on PFS) support and create a new DRM standard reeks of screwing their partners. Sure Microsoft thinks they can get away with it because they are a Monopoly. But Walmart is a monopsony.... when a monopoly meets a monopsony its like Godzilla meets Mothra..... Walmart is going to put its weight behind Fairplay... this will create quite a bit of momentum for Apple
3. Apple gets to have major studios onboard with Walmart's support
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(if you don't, skip to the end of the plot section [wikipedia.org])
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That just sounds extra scary...
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Wal-Mart just being a dick because they can (Score:3, Insightful)
It's my experience that the people who would be buying movies online are not necessarily the same people who regularly shop at Wal-Mart. There are overlaps, definitely, but on the whole the two markets don't overlap. And maybe that's just my own standard biased view point, but this just seems like a classic bully situation. Wal-Mart needs to be put down.
So let me get this straight... (Score:2)
[sarcasm]Maybe they should adopt the diamond industry's business model and maintain an artificial scarcity to keep prices up.[/sarcasm]
These asshats don't have the first
So what if Walmart pulls Disney movies (Score:2)
The real danger is Wally World shoehorning itself into a position of an exclusive distribution channel, which raises the spectre of RIAA again. The $$$ isn't in the product, it's in the distribution channel and WalMart wants to be there. Maybe the revenue from their cut can go towards providing de
Just WHO is Wal-Mart ? (Score:3, Insightful)
The Internet, is BIGGER than not only wal-mart, but ALL retail store chains combined.
Wal-Mart, YOU have to adapt to the modern times. Modern times will not adapt to your ways.
Danger! Image Collision! (Score:2, Interesting)
Here's an idea . . . (Score:3, Interesting)
This is about access to sales (Score:2, Interesting)
Terrible (Score:2, Flamebait)
Wal-Mart is a ridiculously vile company. Their monopsonistic business practices, abuse of employees and generally un-American attitude make them completely unworthy of any financial support. When BusinessWeek rails against a company [businessweek.com], you know it's fucked up.
What happened to Apple's vaunted concern for the community. Ugh. U-G-H.
This just in (Score:2)
Censorship (Score:2, Interesting)
A friend bought a copy of "Fast Times at Ridgemont High" at Wal-Mart.
Everything about the abortion was missing from the film.
I've heard other stories about movies from Wal-Mart as well.
DVD's are just software (Score:2)
The deal here is Apple's proprietary format getting in between the consumer and the content. Walmart doesn't want to have Apple/Disney ransom the format against consumers unless they pony-up the AppleCar
Future is Digital (Score:3, Insightful)
Walmart's air supply is DVD's, period.
FTA:: "Studios are trying to calculate how much longer DVD sales -- 40% of which go through Wal-Mart -- will be a cornerstone of their business."
Walmart is sucking thin air unless they replace sales lost to Digital downloads.
FTA:: "Studio sources say the rest of the majors (Hollywood studios) are very close to joining Disney in a deal with Apple but are holding off until the end of the key fourth quarter (Xmas), when half of all DVD sales occur."
Walmart is out of air after Xmas.
Walmart is the next Luddite if they don't transition with their customer's, Hollywood and popular culture going over to Digital.
In play are Walmart customer's, who's going to win their Entertainment dollar$ and live off the follow-on patronage represented by that $75.00 shopping basket. I would venture that Amazon is looking pretty good to Walmart right about now. A Bricks&Clicks deal would put Walmart's distribution behind every Amazon click to bring real leverage to the marketplace.
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Is this DRM movies? If so I hope that I can still buy them in the shop. I mean I really enjoy watching a movie now and then.
You know DVDs have DRM on them already, right?
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dont have to have anything in common (Score:3, Insightful)
Congratulations, this is why it could work out. You now have the spectrum of people who buy cheap (walmart) and people who pay the Apple Tax (apple). You have two different segments of the market that neither one can hack due to stereotypes. And when you combine their powers...
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Last I checked Apple had sold millions of digital files at around 99 cents each.
So what other "partner" will they find (Score:2)
Yes but here you are talking about all of Hollywood.
If WalMart decides to stop selling DVD's, what are they going to do - only offer Bollywood DVD's? I guess they could do some tie-in marketing and have a sale on winter Saris. I'm sure that will make up for the ginormous revenue stream they would loose not selling DVDs.
It's not like there are other suppliers of the popular product Wa
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No. Next question?
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