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Retailers Pressure Studios on Web Deals 202

Posted by Zonk
from the gotta-get-theirs dept.
mikesd81 writes "Over at the Associated Press, there's an article about retailers pressuring movie studios for the same deals that online servies are getting. Target has sent a letter warning 'that Target might have to reconsider the amount of shelf space allocated for movies if studios undercut the wholesale price of DVDs by giving online services a better deal on digital offerings.' At issue is the low price some studios charge for films downloaded through such fledgling services as MovieLink, CinemaNow and Amazon.com's recently launched video store. The two-disc rerelease of Disney's 'The Little Mermaid' now retails for $14.87 at Wal-Mart and $14.99 at Target. The movie can be bought for $12.99 on iTunes."
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Retailers Pressure Studios on Web Deals

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  • by LordEd (840443) on Tuesday October 10, 2006 @10:29AM (#16377643)
    Retailers want money, shoppers want deals, and cats want all your base. News at 11:00.
  • by tentimestwenty (693290) on Tuesday October 10, 2006 @10:30AM (#16377647)
    Target and Walmart have been undercutting stores since they opened by monopolizing distribution. Now they're going to get a taste of their own business model.
    • Re: (Score:2, Insightful)

      by flight_master (867426)
      I agree with you, and I find it rather interesting that Wal-mart (up here, we don't have Target, so I can't speak about them) is complaining about being under-cut. I've seen many small shops close up since they've been in this town. Glad to see they're getting some 'competition' on their terms.


      Christian
    • The iTunes Music Store's business model is to pressure manufacturers to drastically cut production costs, undercut prices offered by smaller businesses, and compensate employees as little as possible? That's news to me. I thought it was to provide content for the sale of iPods and Macs. Silly me.
      • by jZnat (793348) *
        Nah man, they're just undercutting them, and that's what Walmart and Target did. iTS can do that without having to lay off people and whatnot.
      • The iTunes Music Store's business model is to pressure manufacturers to drastically cut production costs, ...

        Given the iTMS goal of selling iPods, the yes. Apple does that with iPods.

        ... undercut prices offered by smaller businesses, ...

        iTMS does that directly, it is not a profit center itself as it is a marketing vehicle for iPod. Hence the 0.99 price, and low margins. Operating at or slightly over cost.

        ... and compensate employees as little as possible? That's news to me.

        iTMS does that ind
    • by coolgeek (140561) on Tuesday October 10, 2006 @10:45AM (#16377839) Homepage
      I don't see any problem with the studios offering the same price for a movie to these retailers, for the same product. But a DVD is not a digital download. There is no reason they should expect a lower price on a physical DVD, there are additional manufacturing, warehousing, handling and shipping costs. This is just some old tired dogs trying to hang on to the past. We never heard them complain about the cable companies getting a lower price on movies...
    • Target and Walmart have been undercutting stores since they opened by monopolizing distribution. Now they're going to get a taste of their own business model.

      The article is missing the point that one is apples and one is oranges. The used Apple product can't be put on Craig's list or E-Bay. A physical product can.

      Would you like to get a film for $15 and resell it used for $8 when you are done, or pay $13 and have it die with your hard drive?

      This is one of the factors why online digital sales are still beh
    • by unity100 (970058)
      Yea totally agree ! Have at them !
    • by Ucklak (755284)
      Target and Walmart have been undercutting stores since they opened by monopolizing distribution.

      I wasn't aware that Best Buy, Fry's, Krogers, Safeway, Albertsons, Publix, Circuit City, Ultimate Universe, New Generation, Silo, Costco, Hollywood Video, Blockbuster, NetFlix, Suncoast, and any other distributor of media utilize Target and Walmart channels for distribution.

      Target and Walmart are effective wholesalers that makes them effictive distributors which gives them the advantage of undercutting smaller st
  • Huh?? (Score:5, Insightful)

    by joshetc (955226) on Tuesday October 10, 2006 @10:31AM (#16377669)
    Wasn't it the distributers that said the cost of the media and packaging made up a great deal of the cost of DVDs? I'd say the retailers are getting a pretty good deal with only $2 difference between the DVD + packaging + extras vs just a video file.
    • Re: (Score:3, Interesting)

      by Jonny_eh (765306)
      Bandwidth and server maintenance costs too, albeit not nearly as much as DVD packaging/shipping. Or does it?
      • Re:Huh?? (Score:4, Insightful)

        by Mr. Underbridge (666784) on Tuesday October 10, 2006 @10:46AM (#16377843)

        Bandwidth and server maintenance costs too, albeit not nearly as much as DVD packaging/shipping. Or does it?

        Nowhere near. And if you're counting server maintenance, add the cost of the store, theft of stock (that gets passed on to the consumer too), and employee salaries, all of which cost much more for a real store.

    • Re: (Score:3, Interesting)

      by nine-times (778537)
      And a video with lower picture quality and audio quality than the DVD, with no DVD extras, etc. But you know what? And what's with the threat, anyway? "If you take an action that might possibly hurt our DVD sales business, we'll cut ourselves out of the DVD sales revenue completely!" If I were the movie studio, I'd call this bluff.
      • If I were the movie studio, I'd call this bluff.

        In another few years, the movie studios could do just that.

        But right now, B&M DVD sales are too much a part of their revenue stream to allow them to just walk away from it. Just think, if some movie studio said "no problem, we'll just sell exclusively through iTunes," how many consumers would see their movies? Not too many -- it's still only a small percentage of consumers who buy music online, and even fewer who buy movies online.

        The B&M stores are go
        • I'm not saying get rid of B&M, I'm saying if Wallmart won't sell DVDs anymore, you'll still have Best Buy, various record stores, Amazon, Blockbuster, and loads of other ways for people to buy normal DVDs. I don't think Wallmart will actually drop DVDs, though, because they get their strength from the idea that you can buy ANYTHING at Wallmart. I think they're bluffing.

          Of course, I'm not expert, and you could accuse me of underestimating Wallmart's stranglehold on distribution channels.

  • SOP (Score:5, Informative)

    by NineNine (235196) on Tuesday October 10, 2006 @10:31AM (#16377675)
    Standard Operating Practice. I own a retail store, and this happens every day. Manufacturers have to be very careful not to undercut their brick-and-mortar retailers, else they'll lose them. I did the same thing just last week. I found one of our manufacturers selling their products at my wholesale cost online. I told them that they need to fix that, or I'll dump the products. As is, I have customers coming in asking me why we're more than the website, and why they should bother shopping at my store if I'm going to rip them off. Manufacturers can never undercut their retailers (or let one retailer grossly undercut another), otherwise they risk losing them. And, without the retailers, they're dead in the water.
    • I don't know which business you are in but it must be large and you must have some power with your manufacturer. Most businesses have long since left private one-store retailers for the bigger chain stores, especially in terms of music, movies and computers. Any small store that tries to "drop" a product which is being sold lower online or to a bigger store just gets a curt "thank you" from the retailer.
    • So with logical conclusion if these Brick-Mortar company refuse to sell these products because the web undercuts them then there will be a point were the Brick-Mortar will not have anything to sell. Still the iTunes price vs. the DVD price isn't much of a difference. Still as of right now most people want a DVD to play on their TV not on their Computer Screens. As well DVD Quality is a bit higher then iTunes, You have physical medea which you can touch and bring to families homes to watch, together. Retai
      • by SteveXE (641833)
        "DVD Quality is a bit higher then iTunes"

        Who are you kidding a bit higher? DVD is alot higher then itunes. Have you ever tried to upsample a itunes movie to 720p or 1080i? It looks like someone vomited on your screen but do the same thing with a DVD and it actually looks better then it did at its native resolution.
    • by interiot (50685) on Tuesday October 10, 2006 @10:43AM (#16377811) Homepage

      And online movies are less valuable to the consumer. Consider:

      • They don't get the box art
      • The video download is almost certainly much more compressed than the DVD version

      If there's a difference in value to the consumer, it only makes sense that there would be a (small) difference in price.

        • You have to pay for the transfer (even if you don't pay per GB your ISP nevertheless will get their money back somehow)
        • You have to pay for disk space and a backup medium
        • You take the risk of the online store going belly up and "your" movie collection becoming suddenly useless
        • DRM makes sure you can only watch the movies on your PC, postage stamp size, without pausing, no more than 3 times a month, only the week before a full moon.

        I won't "buy" (acquire limited usage rights as granted by the copyright h

      • Considering the fact that most online movie sellers don't allow you to burn your movie to DVD, and are very limiting on how or whether you can play that movie on other computers, or on TVs, I'd say you've overestimated the value of online movies.

        With Apple's set-top box, that'll change a little bit for their store, since you'll be able to stream movies to your TV, but that's still a huge pain, considering you'll need a $300 box per TV to be able to do that. And considering there's still no other way to
        • by rahrens (939941)
          No, it won't cost $300 per TV to stream movies to your TV. That's only if you want the convenient controls the iTV (or whatever they'll call it) will give you. You can connect most Macs to your TV now, you just have to control the playback from the Mac, not a nice remote from your couch.

          Of course, that connection is easy only if you have a notebook - desktops are not always within easy cabling distance of the TV. I know that, but you made a blanket statement that isn't necessarily slways true...

          The disk
      • Don't forget all the extras most DVDs come with. If you actually like watching the deleted scenes, outtakes, etc etc, that can add a lot of value to the disc that you don't get just d/ling the movie itself.
      • In addition to the stuff already mentioned (box art, compression, a physical disc, etc...), you also can't burn these files onto a disc that can be played on a standard dvd player. So unless you buy a proprietary device to connect to your TV, you're stuck in front of the computer (or your iPod, if you were so inclined) if you want to use these files.

        These retailers are all being ridiculous. The costs of manufacturing, packaging and shipping these movies to them in a physical form should more than justify th
        • For the last year or two I am suddenly seeing very marginal movies in Best Buy. Some of it is in collections where you get fifty movies for twenty to thirty bucks. A larger portion of it is in small movies that haven't been available in the past, and/or collections of unpopular movies bundled two or three together.

          Notice also, that Disney and Lucas are suddenly releasing a lot of material on DVD.

          I think the studios are ready to bet big on Blu-Ray or HD-DVD to supplant DVD and are getting what they can f

      • And video quality may be enough in many circumstances.

        Most movies are watched only once or twice, to know that nothing is left behind after the watching is done would be a relief in many cases.
    • Re:SOP (Score:4, Insightful)

      by Lumpy (12016) on Tuesday October 10, 2006 @10:51AM (#16377897) Homepage
      good luck. Panasonic recently screwed every store owner selling their plasmas. I'm an integrator and sell Panasonic 50 inch and large plasmas to my customers wanting built im goodness in their $3,000,000+ homes, but if they can get that same TV at below my cost online they do raise eyebrows.

      We asked panasonic and they told us to pound sand, if I was willing to buy 10,000 set's they would give me a deal.

      You are trying to fight against massive volume and you will never win. Granted the dumb consumer will buy the $600.00 lower priced plasma from some e-tailer, spend $350.00 in shipping to get it to him, and if he has any problems we gladly help at the tune of $120.00 an hour because it was not purchased from us, or it's actually a different model shipped to them so it does not fit the hole we made, does not have RS232 for crestron integration, lack discreet IR codes, etc.... so it either get's sent back for antoher $180-300 in shipping or we do a change order to modify for the new device and end up charging for 2 hours of programming, labor and materials.

      so in the long run they saved nothing by buying it below my cost elsewhere. But then most consumers are not that bright to begin with. they see a shiney at low-low prices and ignore all the added expenses.

      • I am sorry, but I call FUD here.

        I bought an LCD Projection 50" TV online about a year and a half ago. Price in brick and mortars: $3000. Price online: $2000. Delivery $150. I got it in two days. I was a little skeptical about how great a deal I got so I put it on my Amex for protection in case the site was bogus. I had no problems whatsoever though.

        You sound like a high end, high service type shop that probably does a decent job of informing your customers, which is great (though usually one pays through th
    • by TheWoozle (984500)

      As is, I have customers coming in asking me why we're more than the website, and why they should bother shopping at my store if I'm going to rip them off.

      Then you shouldn't have any problem keeping them as customers. It's simple: ask them how much they will pay in shipping (I bet they'll be surprised that the website really isn't any cheaper after they add in shipping). Ask them if they prefer to wait 5-7 business days for their purchases.

      Also, perhaps you should consider not stocking items for which

    • Without products to sell the retailers are dead in the water.
    • by mcmonkey (96054)

      And, without the retailers, they're dead in the water.

      And where are you without manufacturers?

      I understand your interest in not having manufacturers cut out the middle man, but don't forget that's exactly what you are--a middle man. It sounds like both the manufacturers and your customers are questioning the value you add to the transaction. You'd better have a good answer if you want to stay in business.

      So what was you answer? Why should customers bother shopping at your store?

      • by NineNine (235196)
        We offer service. The things that I sell are relatively high end. A few manufacturers have tried dumping into the big box stores, but with bad results. With no sales people, their products simply don't sell. And once they've pissed off the smaller guys, like me, who provide service and sell their stuff, they're pretty much screwed. Maybe this works if you're selling identical, commodity items, such as movies, but for many other products, you can't do this. Going from independent retailers to Big Box i
    • The problem is that anyone that thinks that a downloaded movie file is comparable to its DVD counterpart is, quite frankly, delusional. It's not undercutting because it's not the same product, not the same quality and certainly not the same level of features. The iTunes version doesn't offer 5.1 audio, multiple audio tracks, any subtitle or caption tracks, any interactive features, no commentary, no bloopers/outtakes, music videos, interviews or anything like that, just a more heavily compressed video fil
    • by vanyel (28049) *
      I worked for "a large chipmaker" which had the same problem when they dabbled in the retail market, vs their typical OEM channels.

      In this case, it really pisses me off as a consumer. These are different products with different costs and different benefits. It's even worse in the ebook business: a large number of the books I want to buy in e-formats are being sold at *hardcover* prices. It is absolutely inexcusable to make the consumer pay for the production costs of a book when there are essentially no p
    • Re: (Score:3, Insightful)

      by nine-times (778537)

      What you're saying makes sense, and I haven't really thought about that. At the same time, these complaints seem unfounded since it's a different distribution method entirely distributing what is in many ways a different product. I can understand why Wallmart and Target wouldn't like it, but at the same time, it seems a little crazy for them to be threatening this way.

      The way I figure it, people love TV and movies. They're going to want to see them. The studios love making them and love selling them an

  • WTF?!?! (Score:5, Insightful)

    by ImaNihilist (889325) on Tuesday October 10, 2006 @10:32AM (#16377681)
    PROBLEM: People are paying 25% less for a product of inferior quality. Wait...what's the problem? Shit on iTunes is still way to expensive considering the inferior quality, no hard copy, and the inability to burn to disc. Why don't they just stop playing around, and come up with a unified pricing model for all media. CD, DVD, iTunes, Amazon - $9.99. Make everything $9.99 and I'll go on a buying spree right now. I'll spend $1,000 in the next 20 minutes.
    • by rf0 (159958)
      The thing is with most of the population they want to show off what they own and like to have a tangable good. I can either hold up my hard disk and say I've got 1000 MP3's / 50 movies on here in a sub format or have the DVD's and CD's on a shelf what I can take with me if I want to or lend to a friend. Also the physical formats are a lot harder to destory. It doesn't take much to delete a digital copy..
      • Re:WTF?!?! (Score:4, Insightful)

        by Rob T Firefly (844560) on Tuesday October 10, 2006 @11:17AM (#16378251) Homepage Journal
        Plus, I can throw my DVD into a DVD player, computer, games console, or whatever else comes out in the future to support the format. I can enjoy whatever special features and extras are thrown in to appeal to my movie-geek side. I can even rip media from a DVD and freely convert it to any digital format I could ever want, in order to transfer to whatever video-playing gadgets I desire, and with no loss in quality other than what I dictate in the settings. And, I'm able to do this all from a physical medium that I only pay for once and for all, and that (barring accidents) will probably be around and viable longer than I will.

        Can you say the same for any file on a hard disk, DRM'd or not? My oldest DVDs have outlasted something like five or six failed hard drives at this point, and I was a relatively late adopter of DVD.
      • by hoggoth (414195)
        > the physical formats are a lot harder to destory. It doesn't take much to delete a digital copy.

        You must not have kids.

        About 50% of my physical DVDs have been destroyed beyond usability by my kids scratching them when inserted and removing them. I've paid the Disney tax more than once for the same material.
        So far my kids haven't managed to damage a single bit of the movies on my file server.
        Oh, and for those that say when the hard drive goes so does all your media, don't be an idiot. Make backups.
    • by FellowConspirator (882908) on Tuesday October 10, 2006 @11:09AM (#16378141)
      Seriously. The $12.99 you pay for the video download thorough iTunes is a rip-off. The video resolution and quality is inferior, you don't get the extras, you don't even get to burn it to a DVD so the kids in slap it in the DVD player in the car/living room. People are paying a little (20% less) because they are getting MUCH less (1.4G of movie versus 18G of movie -- can't play on standard equipment).

      I'm not saying that $15 is a fair price for a DVD either. It costs the manufacturer, last I heard, about $2.50 for the DVD and packaging (including the DVD production costs, discounting the original film production cost which is, on average, fully recouped during its theater run).

      Heck, if net-neutrality really disappears, the cost of the iTunes download may skyrocket. I can't blame Target and Walmart for trying though. It's all about putting the squeeze on the vendors.
      • by misleb (129952)
        People are paying a little (20% less) because they are getting MUCH less (1.4G of movie versus 18G of movie -- can't play on standard equipment).


        18G of movie (HD-DVD/Blu-Ray) can't play on "standard equipment" either. :-p

        -matthew
        • 2 DVD9s (what you get in the package from Target, 2x9G=18G) do play on standard equipment. The iTunes download, however, will not.
        • by jedidiah (1196)
          Sure it can. While the encryption on HD DVD's may not yet be broken, they are at least open standards meant to be used by a variety of manufacturers.

          Compared to the "only Apple Corp and no one else" nature of iTunes, it's almost GNU.

          There WILL eventually be an in dash HD-DVD or BlueRay DVD player for my car just like there's an in-dash old style DVD player in there already.

          No such "iTunes" device exists. At best, some car stereos offer "integration" with the only vendor's devices.
  • by Fahrvergnuugen (700293) on Tuesday October 10, 2006 @10:33AM (#16377693) Homepage

    Doesn't it seem reasonable that a downloaded copy should be a little bit cheaper than a physical copy? I mean after all, when purchasing a downloadable copy of a movie you save the cost of:

    • Stamping the disc
    • Printing the cover & case insert
    • Shipping the DVD through the distribution network
    • Stocking the item
    • Paying a clerk to check the item out

    I'm sure there are more savings, those are just the few real obvious ones.

    It sounds to me like the Tar*Mart's of the world are just being greedy.

    • They are being greedy and also focused on the one part that DVD's have....the movie. The only thing iTunes has that a DVD does is a inferior copy of the movie. When you buy DVD's, you get so much more. You get menus and other content you simply do not get on the download. You get making of clips and many things that some people do not like, but I personally think is worth the extra 2 bucks.
  • by Moby Cock (771358) on Tuesday October 10, 2006 @10:33AM (#16377697) Homepage
    I am becoming increasingly frustrated with big companies whining when technology renders their business model obsolete. If Wal-Mart and Target want to retail movies, then do it in the manner that consumers want. Whining that a competitor is better at it is just sad.

    Good companies evolve and move to where the markets are, they don't cry about how they are so hard done by because a competitor has them beat.
    • by sterno (16320)
      I'm sure they complained to the buggy whip manufacturers too. I think in the end though these are empty threats. The truth of the matter is that DVD's get people into the store. Getting somebody in to buy a single DVD leads to two or three or maybe a new DVD player or clothes or whatever else. It's like the milk in a grocery store.

      Lest we forget, Walmart and Target both sell CD's in their stores still even though downloading music is a very established business. This is a negotiation tactic, trying to
      • by Moby Cock (771358)
        I think what you say is true, and it sheds light on just how empty the threats by Target et al. are. They need to stock DVDs just as much as the studios need them too. By threatening to reduce 'shelf space' without a better deal is just bullshit posturing. The consumers don't really care who sells them DVD, they just want the content. If they have to get it online, well, so be it. And, as you say, this will hurt Target rather than the studio, since they won't be picking up other items in the store.
    • Re: (Score:3, Insightful)

      by SnowDog74 (745848)
      True but in the real world, ego stands in the way of sound business decisions. Men who wield power do so by applying their own version of the Reality Distortion Field to their otherwise commonplace ideas, regarding themselves as innovators for having re-invented the wheel for the umpteenth time.

      The problem is that great ideas are hard to come by, and "insanely great" ideas are extremely rare... So, when a leaner, more agile company that operates according to this economy of scale comes along and tosses asi
    • by swillden (191260) * <shawn-ds@willden.org> on Tuesday October 10, 2006 @10:54AM (#16377961) Homepage Journal

      Good companies evolve and move to where the markets are, they don't cry about how they are so hard done by because a competitor has them beat.

      Smart companies evolve and move to where the markets are *while* crying about how they're being abused, in the hopes that it will slow down the movement enough that they can stay ahead of it.

      Not saying it's "right", but it's reality.

    • Re: (Score:3, Insightful)

      by Vokkyt (739289)

      If Wal-Mart and Target want to retail movies, then do it in the manner that consumers want. Whining that a competitor is better at it is just sad.

      Except that they are already doing it in a way the consumer wants. No, really, they are. Most consumers do not want to watch a .avi or .mp4 file on their computer; they want a physical DVD to pop into the $20 DVD player they bought at Target/Wal-Mart the week before. This is what I really don't get in all of this; Target/Wal-mart and any other retailer in th

  • Could it be? (Score:5, Insightful)

    by Penguinisto (415985) on Tuesday October 10, 2006 @10:35AM (#16377725) Journal
    *gasp* - could it be the free market in motion working against the MPAA's money grab? COOL!

    Man, I don't know whether I actually want to believe what I'm seeing or not...

    Now if only they could put the same pressure on the RIAA...

    /P

    • Walmart and Target are what's called monopsonistic buyers. Which is the exactly opposite of a free market.

      In a free market the consumer has the power. This is negotiation between corporations. Whatever Walmart/Target and Disney/Apple finally agree to, the consumers just have to bend over and take it. The consumer has no say whatsoever in the price of anything here. That is not a free market.

      • Actually, it is, though not directly.

        I grok what you're getting at as per the two retailers and the weight they carry, but I gotta be picky on something: WalMart and Target often (if not mostly) compete directly against each other, and against others, in any given city or town. By definition the term "monopoly" in any form would have a very hard time applying to either of them (esp. when you throw in other DVD-selling entities like KMart, ShopKo, BestBuy, and Circuit City, as well as regional big-box reta

        • A retailer is both a buyer and a seller. When selling goods there may be some competition (though that is dinimishing) but when they are buying its a whole other story. If you are a supplier and Walmart is selling a majority of your inventory, you are basically owned by Walmart, since if they decided to drop your product, you'll have to close up shop.

          Now a monopsonistic buyer can cancel out the effects of a monopolistic supplier, but in this case the monopsonistic buyer is also a seller itself and that s

  • by mrfett (610302) on Tuesday October 10, 2006 @10:36AM (#16377731) Homepage Journal
    why should these two products be priced equivalently? The retailers are looking for preferential treatment, not equal treatment. Download services are selling gimped products, not full multi-disc DVD collections. the two things are entirely different, and if anyone is being short-changed on price it's the download services. Why buy only the movie when for $2-4 more you can get all the extra content at higher quality?
  • WTF? (Score:3, Insightful)

    by stealie72 (246899) on Tuesday October 10, 2006 @10:38AM (#16377747)
    OK, am I the only one who thinks that $12.99 for a magical digital-only copy isn't that great of a price?

    For an extra $2, I get the discs with full-quality DVD video on them, and I can burn them in whatever format I want, and use them on any DVD-equiped TV. Not to mention a handy-dandy carrying case with some nice graphics from the movie on it.

    Seriously, if ITMS was selling it for like $6, I could see retailers being pissed, but $12.99? Give me a break.
    • Oh, sure, your might consider it fair use to burn them in any format you want, but those discs are encrypted.

      So, either you need to demonstrate that you can code an entire decryption and storage program for transferring those movies, or we just might need to have you talk to Bruno about where you acquired your illegal decryption software. You see, it's legal for you to do this on your own, but nobody is allowed to help you, by law.

      Isn't modern government swell! [/sarcasm]

      BTW - I think the digital movie-only
    • by Zadaz (950521)
      No, you're not the only one.

      And don't don't forget all of the extras, languages, etc that aren't part of online efforts.

      As I've said before, I would -love- to buy movies online. But they have got to make it worth it for me. These crippled, compressed wastes of bandwidth are worth a lot less than a DVD I can use as I please. (Well, not legally, but still.)
    • by TubeSteak (669689)

      OK, am I the only one who thinks that $12.99 for a magical digital-only copy isn't that great of a price?

      Think about all the clueless computer users, for whom just burning a CD/DVD is a big deal that required note taking and step by step instructions.

      Now consider that they do not have the ability to comprehend downloading a program like Gordian Knot and ripping/encoding their own DVD Rips, much less using whatever craptacular tool might come with their burning software.

      $12.99 is a magical price, because it

  • by sheldon (2322) on Tuesday October 10, 2006 @10:38AM (#16377751)
    If I had a choice...

    $15 at Target
    $13 at iTunes

    $1 at the movie rental kiosk

    I'm going with the movie rental kiosk, unless I want to keep the movie for a long time so I can watch it many times... I'll go with the DVD at Target. So I don't think Target has much to fear here as far as lost revenue.

    I will say, that Apple's DRM is just a whee bit better than DivX, although not by much... Sheesh!

    Make sure you deauthorize your computer before you upgrade your RAM, hard disk or other system components. If you do not deauthorize your computer before you upgrade these components, one computer may use multiple authorizations. If you find you have reached 5 authorizations due to system upgrades, you can reset your authorization count by clicking Deauthorize All in the Account Information screen. Note: You may only use this feature once per year. The Deauthorize All button will not appear if you have fewer than 5 authorized computers or if you have used this option within the last 12 months.

  • Class play (Score:5, Insightful)

    by suv4x4 (956391) on Tuesday October 10, 2006 @10:43AM (#16377813)
    Class business play in 6 acts:

    1. "we threaten to reduce shelf space for DVD-s" -> they don't know of online offers will decrease DVD sales, but they add few numbers and decide it's plausible, therefore worthy of protection

    2. let's say Hollywood proceeds with undercutting them online

    3. retailers reduce shelf space: as a result from this, DVD sales decrease. Retailers say: "you see? you're ruining out business"

    4. Hollywood increases online prices to match DVD's in fear not to lose from DVD sales

    5. People refuse to buy vaporware DRM-ed download for the cost of a DVD and online sales wane

    6. Aftergame: retailers are happy they eliminated the competition (online), Hollywood is happy they kept their DVD sales (not that they'll stop bitching about otherwise), customers: screwed.

  • All Walmart has to do is go with the model they've proven viable time and time again: switch to sweatshop and/or child-labor-produced DVDs, reduce staff salary's and benefits and eliminate needless training.
  • Uh, sorry... (Score:4, Informative)

    by Kantara (246758) on Tuesday October 10, 2006 @10:52AM (#16377919)
    But Target and Wal-Mart needs to RTFP. Apple's pricing is as follows:

    $9.99 - Library purchase
    $12.99 - Pre-release and new releases for the first week
    $14.99 - After one week as a new release and before it becomes a library purchase (Take a look at Annapolis - $14.99. It was $12.99 the first week Apple started to sell videos)

    So, Apple gets one week where they are $2 cheaper before Target matches and Wal-Mart undercuts their pricing. They are just complaining that they have new competition.
  • First of all, DVD media and downloadable iTunes movie content are not in the same market really. DVDs are made to be played on DVD players and have much higher resolution, but cannot be ripped and put on an iPod or other portable video player (yeah, I know. it is possible, but impractical for most people). Conversely, movies downloaded from the iTMS are of a significantly lower resolution than a DVD, cannot easily be played on a DVD player, and lack special features common on DVDs, but you can play them
    • movies downloaded from the iTMS are of a significantly lower resolution than a DVD

      You do know that their video is 640x480 now, don't you? I realize it's not 720x480, but for a standard 4:3 video, it's basically the same thing. I could understand the point if they were still doing 320x240. Of course, just because the resolution is basically the same as broadcast NTSC, doesn't mean the quality is the same. I do realize that the quality of the iTunes downloads is not likely to be as high as a 4:3 DVD.
  • First, the difference in prices suck and the retailers should be happy they're not reallying being undercut. I get 2 audiobooks a month from Audible.com. Heavy on the DRM, but they work great for listening on the ipod. I pay $10 each for those two books. Retail, to buy the 10-15 CDs they are usually sold on cost $40-60 each. Big savings and the downloaded version is actually more convenient that the CDs.

    If the retailers want to sell "the same thing" let them buy the pre-recorded DVDs on a spingle. No
  • And the point is? (Score:3, Interesting)

    by frovingslosh (582462) on Tuesday October 10, 2006 @11:00AM (#16378023)
    The two-disc rerelease of Disney's 'The Little Mermaid' now retails for $14.87 at Wal-Mart and $14.99 at Target. The movie can be bought for $12.99 on iTunes.

    So for $14.87 you can get 2 already made discs at Walmart, in a nice storage case, with plenty of extra bonus material, that will play on any (region 1) DVD player, or for less than 2 dollars less you can spend your own bandwidth to deliver a copy to you, and provide your own packaging and media, that contains only the movie, is of a much poorer quality, has a DRM infestation that will keep you from using it where you want to use it, and eventually you will not be able to play back on the system you want to play it back on. If you buy the Wal-Mart version you ratain right of first sale and you are free to resell it if you want, or lend it to friends, or even give it away. If you have the downloaded version you can't legally do any of these. And somehow Wal-mart wants to claim that this alternate outlet puts them at a disadvantage? I'm sure they would like to have a complete monopoly of distribution, but any argument that cheaper on-line sales unjustly undercuts them is completely bogus, and if anything it might even improve their sales when the on-line mark realizes what a bad purchase they made. It certainly makes the Wal-mart price for a couple of mass produced and packaged discs look like a great deal in comparison to on-line pricing.

    • So for $14.87 you can get 2 already made discs at Walmart, in a nice storage case, with plenty of extra bonus material, that will play on any (region 1) DVD player...

      Don't forget the fact that those region 1 DVD players can be had for $30, instead of having to pay $500 for a computer (or more for a Mac), plus $250 - $350 for the convenience of having an iPod to carry the movies around on, plus $300 for the Apple iTV set-top box to actually be able to watch the movies on your TV. I know that most people
  • The "hard media" DVDs *should* be more expensive than softcopy-only versions of a movie. The versions sold over iTunes (to my knowlege, I've not actually bought one) only have the movie itself, at a lesser resolution, and none of the special features, extras, secondary language tracks, etc.

    That said, I think that the online copies ought to be even cheaper (high price of $10, and maybe $7.50 for "older" titles, $5.00 for "classics"), for just that reason.

    This will definitely be interesting to watch, to see
  • Frankly, when I buy a DVD, I generally want the special features, as well as the convience of being able to watch it on my TV. As I don't have a Media Center PC, I don't get that covenience with pay-to-download movie services. I also don't get the bonus features from any of those services. Until iTunes or Amazon's service can satisfy my demands for those, I'll stick with the physical disks, thankyouverymuch.
  • Studios Win Again (Score:5, Insightful)

    by mpapet (761907) on Tuesday October 10, 2006 @11:05AM (#16378091) Homepage
    The studios controlling the distribution of these films are the big winners again.

    Retail DVD costs: Media, replication, packaging, distribution, slotting fees, spoils and other logistics problems, and varying amounts of advertising. Throw in the loss of control of the DVD content. That's your priviledge to make and keep personal copies, freedom to play the movie when and where you want. Don't forget the graft required to get stuff on the shelves of your average big box retailer, loss of control of the distribution channel once it hits the retailer's dock and a million other tiny headaches.

    Retail Download: Zero duplication costs, nominal distribution costs, advertising. *Total* control of distribution, ability to control when and where the consumer can play the content. (windows media player 11 has this feature) Beyond that granular control of the rights conferred upon the consumer through DRM.

    Consumers are willing and happy to trade their freedom for $2. The studio pocket millions of extra dollars.

    For every j@ck@ss that thinks this is the "free market" at work, will they please explain where the innovation is in this model? How is the consumer market for movies -more- competitive as a result? I can't see how consumers benefit in an industry controlled by an oligopoly.
    • by llZENll (545605)
      No one is forcing you to buy movies, if you don't like how they are distributed or how much they charge, then don't buy any. Instead of bitching start your own movie studio and sell your movies for $1 each, chances are you are not going to last long.
  • by misleb (129952) on Tuesday October 10, 2006 @11:08AM (#16378127)
    I'd be more than willing to pay an extra $2 for the convenience of packaging and burning to disc. I mean, I'd probably do it anyway myself if I downloaded it. The blank media itself nearly takes up that $2. I say a $2 difference isn't enough to make the download time, time burning, and media worth it. The brick and mortar stores are actually getting a pretty good deal.

    Although I don't find myself buying movies at brick and mortar stores. If I'm really going to buy a movie (pretty rare) I'll just order it from Amazon or something. Usually it is for a gift. I don't see much point in owning movies except for the few really great ones that you might actually watch more than once or twice. But even then, repeat viewing loses its appeal as I get older.

    -matthew
    • by teg (97890)

      I'd be more than willing to pay an extra $2 for the convenience of packaging and burning to disc. I mean, I'd probably do it anyway myself if I downloaded it. The blank media itself nearly takes up that $2. I say a $2 difference isn't enough to make the download time, time burning, and media worth it

      You would if you could, but you can't - that's one of the reasons 12.99 is a pretty bad deal. You can play it on a computer, and that's about it.

  • It's simply not fair that when you download a film that you don't get the extras, a disc and all that wonderful packaging. It's also not fair that the quality of the downloaded content isn't as good as a full DVD of the same film. Apple should be forced to include all of these features so that there are equivalent items being bought by the consumer.

    Then, maybe, just maybe, Target and Wal-Mart will actually have an argument.
  • Target has sent a letter warning 'that Target might have to reconsider the amount of shelf space allocated for movies if studios undercut the wholesale price of DVDs by giving online services a better deal on digital offerings

    Studios sent a letter back saying "Wal-mart sells enough discs for two target chains put together, and then some, so we don't need you. don't let the door hit your ass on the way out. By the way, your business model is doomed, suckers." Enclosed was an audio CD containing 74 minute

  • Of course there isn't all the extra scenes, games, etc that are you the physical DVD when you download from iTunes.
    • Do they still have the ads for other movies, ads for products, and the warnings that you should always buy your DVDs because they want you to?

      Those are extra I could certainly do without.
  • Retailers are morons. They see iTunes, Amazon.com movie download, movielink as threats. They don't sell DVD Quality movies but poor quality movies. And only play on the computer or portables. I won't be buying any movie online until I can download entire DVD iso.
  • by Tjp($)pjT (266360) on Tuesday October 10, 2006 @07:52PM (#16385719)
    Target and Walmart are buying a different version of the movie. It is in a tangible, unlimited sharing form. iTunes M Store sells an intangible collection of bits that needed no additional packageing per unit, so cost less to distribute. It has usage restrictions. Tell Target and Walmart to start a download service for movies and quit gripping.

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