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Target Exiting Digital Movie Business

10 Feb, 2015 By: Erik Gruenwedel

In a blow to Hollywood’s quest to sell movies online, the nation’s second-largest retailer pulls the plug

Target has quietly announced it will cease operating digital movie platform Target Ticket, effective March 7. At that time, the transactional VOD and electronic sellthrough service, which bowed Oct. 1, 2013, will no longer be accessible on portable devices, gaming consoles, tablets, smartphones or on the Web.

“Target has made the decision to end the services offered on Target Ticket and will be focusing efforts on other entertainment offerings,” the retailer said in a statement on the TargetTicket website.

The move marks the second major retailer to stop selling and renting new-release movies online. Earlier this year, the United Kingdom’s largest supermarket chain, Tesco, sold blinkbox to a telecom operator, which promptly shuttered it.

Notably, consumer spending on EST titles mushroomed more than 30% in 2014 to $1.5 billion, according to DEG: The Digital Entertainment Group. The spike in EST of theatrical titles — often released up to three weeks ahead of disc — skyrocketed more than 60%.

The Minneapolis, Minn.-based retailer said digital content purchased on Target Ticket would be accessible through Best Buy’s CinemaNow platform at no additional cost. In addition, titles purchased with UltraViolet functionality can be accessed through any digital movie service with UV functionality.

Target’s departure leaves Walmart’s Vudu.com as the largest retail-based digital movie store. Target recently announced it would be exiting the Canadian retail market.

Wedbush Securities senior analyst Michael Pachter said Target's move underscores retails' diminished influence selling online.

"There is no reason to use retailers to sell digital movies," Pachter said.

Walmart recently launched an initiative whereby consumers buying discs in stores could automatically register UltraViolet-compatible titles at Vudu through the store-based receipt.

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