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Wal-Mart Pursues Movie Download Service

5 Sep, 2006 By: Erik Gruenwedel

As expected, Wal-Mart is in talks with the major studios to begin offering a movie download service in the near future, according to a company spokesperson.

“We're having conversations with some of the studios and technology companies, but we haven't made decisions or announcements at this point,” said spokesperson Jolanda Stewart. “It is strictly conversations and discussions.”

The Bentonville, Ark.-based retailing behemoth is eying a download service in an attempt to establish early a beachhead in the burgeoning digital-distribution business model while at the same time circumventing a pending movie download option at Apple Computer's ubiquitous iTunes music store.

Wal-Mart's attempt to launch an online movie rental service in the footsteps of Netflix and Blockbuster Online failed to gain traction and the retailer scuttled the service. Conventional wisdom suggests the retailer doesn't want to play catch up with digital sellthrough.

BusinessWeek reported that Apple's download service would sell new movies for $14.99 and $9.99 for catalog titles. The report also said Wal-Mart, which will account for 40% of all DVDs sold this year, had approached the major studios demanding a significant reduction in wholesale prices to compete against Apple.

Wal-Mart spokesperson Stewart dismissed the report as speculation.

“I'm not aware of that being the case and of course we don't comment on rumors and speculations,” she said.

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