Walmart Threatens Movie Studios

by Janet Meyer Sep 27, 2006

On September 6, James Stoup wrote about what he called the gathering storm between Wal-Mart and Apple. In it he suggested that Wal-Mart would open it’s own online movie store. He asked what other choice the retail giant has.

This week Wal-Mart decided they do have another choice.

According to the New York Post, the Disney studio offers Apple a better deal than it does to Wal-Mart. Other studios have expressed an interest in coming aboard. They have seen the success of iTunes and want a piece of the download pie.

Wal-Mart doesn’t want to risk losing its DVD business to Apple. They have threatened retaliation. According to an unnamed source in the article, Wal-Mart plans to use it’s massive buying power to keep the studios in line. In other words, they have told retailers that if they follow Disney’s lead, they will notice a drop in orders from Wal-Mart.

Somehow I find that ironic. For years Wal-Mart has used its ability to purchase items cheaper than anybody else to undercut the competition. Now that another company is doing it to them, they don’t like it at all.

Do you think Wal-Mart’s threat will have any impact on whether or not Hollywood joins iTunes? I’m not so sure that Wal-Mart will really be hurt by the ability to download movies. A lot of customers would prefer to purchase a hard copy instead of loading it their iPods. There is also a certain amount of impulse buying when people shop at Wal-Mart.

Wal-Marts threat to purchase fewer movies from the studios does, however, have potential to hurt them. The risk is that customers will turn to iTunes to find the movies they can’t get at the retail store. Posts on several internet forums suggest that many users don’t want to download and watch a movie on the small screen. Yet buyers will go where it is easy to get the product. If they can’t get the DVD they want while shopping at Wal-Mart, they may just develop the habit of going to iTunes for it.

If I were a retailer I wouldn’t even consider trying to make a deal with Apple just yet. I’d wait until after the Christmas season, and during this time I’d be watching Disney closely. After Disney’s deal with iTunes, Wal-Mart sent several cases of DVDs back to them. I’d wait to see if any of this seemed to hurt the company.

Wal-Mart’s threats are an interesting strategy. Wal-Mart is afraid that iTunes will cut into their sales, so they packed up Disney’s DVDs and sent them back to the company. This gives them fewer DVDs to sell, thereby cutting into their sales.

How about you? Do you think movie studios will listen to Wal-Mart, or will they get enough business from iTunes to risk losing their largest customer?

I’m guessing that with time things will cool down. Just like with music, you’ll eventually be able to purchase DVDs from both. Maybe Wal-Mart will even be able to negotiate a better deal with the movie studios. This could only benefit consumers.

I don’t have any plans to download movies for the same reason I’ve never bought those tiny televisions that were being sold everywhere at one time. I like a larger screen to watch movies on. If I can’t find what I want at Wal-Mart, I’ll stop looking there and go somewhere else.

Do you think this is a smart move by Wal-Mart? Does iTunes really pose a threat?

Maybe movie studios don’t want to lose this chain as a customer, but obviously Wal-Mart feels they need the DVDs, too. It might be smarter to try to find a way to work together.




  • Do you also criticize Gillette for not letting Bic make replacement blades for Gillette razors?  It’s the same business practice.

    In fact, Bic DOES make a replacement blade for the Gillette.  And there’s nothing Gillette could really do about it even if they wanted to.

    A better example than razors would be printers and the lack of third-party ink refills.  And I, as well as many millions of others, DO criticize this practice. 

    Again, I am consistent in my criticism of anti-competitive practices, whether it be HP, Epson, Apple, or Wal-mart.  And I’m the only one so far.

    Beeblebrox had this to say on Sep 29, 2006 Posts: 2220
  • Strong arm tactics are Microsoft dictating to other companies how they are allowed to deal with other companies if they are to use Microsoft’s products.
    Strong arm tactics are Wal Mart dictating to movie studios what their agreements with anothher party are to be if they want to do business with Wal Mart. In my opinion this is illegal. It is attempting to influence the market to maintain your own advantages in such a way that prevents others from competing fairly.
    Not licensing the technology that you OWN is not a strong arm tactic. Apple worked for quite a while to perfect it’s product. Why should they just give that up by letting cheaper competitors come in a ride the coattails of their success and hard work? That is not the same thing that Wal Mart is doing here by any stretch of the imagination and your thick-headed desire to blast “Apple-apologists” has completely confused your sense of what competition, monopoly and strong arm tactics are.

    Competition is NOT allowing others to jump onto the popular product that you own! Competition is allowing others to create their own product. Another company could easily create another iPod competitor that would have less restrictive DRM and try to compete. Apple does absolutely nothing to prevent any of the other companies out there to do this. If they did, THAT would be what Wal Mart is trying to do. Just because you and a lot of other people want to be able to take the most popular device out there and do everything you wnat with it, doesn’t make Apple anti-competitive. It just means you and all those people need to read more before you make your buying decisions.

    The difference is that Apple has always done their own thing and said that they want to control their own products and who they sell to. They don’t tell PC manufacturers that they can only install iTunes if they remove other jukebox software.

    They OWN the patents to the iPod. It is their intellectual property. It is their right to say to all other vendors what they can and can’t do with it. Your examples are completely out of line with the subject at hand.

    The printer ink example may be similar, but guess what. The printer manufacturers own the tech that allows them to dictate who will manufacture ink cartridges as well. It is not anti-competitive either since there are a lot of other printers you can buy. Jesus, it’s like complaining that your neighbor won’t let you knock down the wall in their living room so you can expand your apartment.

    What we are talking about here is PROPERTY. In this country (for a little while longer at least) individuals and corporations are still allowed to own said property. There is no public ownership of something just because you have purchased it.

    Apple does some things that drive me crazy. I still haven’t purchased one video off iTunes because I don’t like the fact I can’t burn it to disk. Call me an Apple-apologist if you like. That’s fine, I could care less. But, if there’s something I don’t like I vote with my dollars. I don’t go on a blog and insite flame-wars by blaming a company for not letting me do everything I want with their intellectual property.

    You’re right about one thing. You are consistent with your criticism. Consistently wrong.
    And I’m no Apple-apologist. I’m a capitalist. And when the public starts demanding the right to dictate to privately held companies and corporations we will severely destroy all the incentive for companies to develop new and exciting technologies. Whether those companies be Apple with it’s computers and iPods or Epson and HP with printers and ink.

    Gabe H had this to say on Sep 30, 2006 Posts: 40
  • Call me an Apple-apologist if you like.

    Okay.  You are an Apple apologist.  No ifs ands or buts about it.

    That’s fine, I could care less.

    Oh, obviously.

    But, if there’s something I don’t like I vote with my dollars.

    Isn’t this whole thread a rant against Wal-mart?  Didn’t you just say something about strong-arm tactics?  Aren’t you saying that what Wal-mart is doing is wrong? 

    Gee, can’t you just vote with your dollars?  Wal-mart isn’t the only store that sells movies.

    You’re an Apple-apologist AND a hypocrite.

    Beeblebrox had this to say on Sep 30, 2006 Posts: 2220
  • You’re an Apple-apologist AND a hypocrite.


    Did you ever notice that all your debate “tactics” are ad hominem attacks?

    You don’t actually refute any points the other people make. You just call them names (which thereby makes them wrong because clearly an apologist and hypocrite can’t be right even though I have said nothing to refute their point of view).

    By using this tactic, you just prove that you don’t have a valid point upon which to rest your argument.

    You’ve never explained how not licensing FairPlay is an anti-competitive tactic, because you can’t. It isn’t. Therefore, you have to resort to name called to “prove” your point.

    vb_baysider had this to say on Oct 02, 2006 Posts: 243
  • name calling, that is.

    vb_baysider had this to say on Oct 02, 2006 Posts: 243
  • By the way, you’re way wrong about Bic. They don’t make replacement blades for Gillette… They make their own blades, razor handles and disposables.

    The way razor blades are fastened to a razor handle are always patented designs, which means a competitor can not make replacement blades which use that patented design without a license.

    Bic makes their own razors and blades. That’s how they compete… Not by demanding that Gillette “allow” them to make Gillette replacement blades.

    The only time you can find generic blades is for razor designs over 20 years old (ie- the patents have expired), such as the Trac II and Atra designs.

    This is why you can’t go into the supermarket and get generic replacement blades for your Mach 3. The blade design is patented and won’t expire until 2018.

    vb_baysider had this to say on Oct 02, 2006 Posts: 243
  • You’ve never explained how not licensing FairPlay is an anti-competitive tactic, because you can’t.

    I’ve explained it ad nausuem.  Thoroughly and completely, about a million times.  The problem isn’t my lack of explanation, it’s the fact that your head is so far up Steve Jobs’s ass that you can’t see anything beyond the Apple-press release echo-chamber.  You can only acknowledge what he tells you.  Everything else bounces off as incomprehensible gibberish.

    And according to Oligopoly Watch, Bic does make replacement blades compatible with Gillette.  But even if they didn’t, it doesn’t matter.  There’s a difference between patented hardware differences and arbitrarily locking out otherwise compatible songs the way Apple does.

    And name-calling is far from a last resort.  It’s like when Steve Wozniak refers to people like you as “Mac bigots.”  He’s calling you a name but he’s also making very solid points.  The two are not mutually exclusive.

    And frankly, it’s not like you have any real problem with name-calling anyway.  Mac users on this site regularly refer to Windows users as “sheeple,” “drones,” “lemmings,” “idiots,” etc.  With any complaints coming from you or any other Mac-bot about it.  It’s just more bigotry, hypocrisy, and stupidity on your part.

    Beeblebrox had this to say on Oct 02, 2006 Posts: 2220
  • That should be: “withOUT any complaints.”

    Beeblebrox had this to say on Oct 02, 2006 Posts: 2220
  • Nice. Another umpteen ad hominem attack.

    head is so far up Steve Jobs’s ass

    More name calling. That really proves your point. Very nice. You should be on a debate team.

    Steve Wozniak refers to people like you as “Mac bigots.”

    And again.  You don’t know me and you have no idea if I’m a “Mac bigot” as you say. You just use the term as an ad hominem attack to “demonstrate” that my debate points don’t matter, instead of refuting the actual points.

    He’s calling you a name but he’s also making very solid points

    Bullshit. Name-calling does not “make a point” in any real debate—it’s a Internet bred tactic to start flame wars. State facts about the topic to refute your opponent. Calling them names does nothing to support your argument… which is all you’ve done once again.

    I’ve explained it ad nausuem.  Thoroughly and completely, about a million times.

    No, you haven’t. All you’ve done is whine that FairPlay DRM won’t play on other devices. You’ve not shown how this is anti-competitive.

    The consumer still is allowed to choose where they want to get their music, and the iPod/iTunes integration does not prevent this. Just because iTunes DRM music doesn’t play on a Rio doesn’t make it anticompetitive. Just like how a Blu-ray DVD won’t play on an HD DVD player.

    Next, you’ll be saying that not releasing a Windows version of iPhoto, iMovie and iDVD is anti-competitive because you need a Mac to run them.

    I’ve even shown that iTunes *does* support / sync to non-iPods with music that isn’t DRM’d… a point you seem unable to refute.
    iTunes 4.2 or later has built-in support for Rio One, 500, 600, 800, 900, Nike PSA, S Series players, Fuse, and non-Mass Storage (MSC) Cali and Chiba.

    From what I’ve been reading on the net, it’s up to the MP3 maker to allow their device to sync with iTunes (for non-DRM’d music). Rio and some iRiver models support iTunes sync. Creative doesn’t because Creative chooses not to, not because Apple prevents them.

    I see no anti-competitive practice ALLOWING other MP3 players to sync with iTunes. Quite the reverse, actually.

    There’s a difference between patented hardware differences and arbitrarily locking out otherwise compatible songs the way Apple does.

    Please explain how a software patent is different legally than a hardware patent. You claim there is one here, but don’t explain.

    There is no distinction in the eyes of U.S. law other than software being “code” rather than a tangible mechanism.

    Windows users as “sheeple,” “drones,” “lemmings,” “idiots,” etc

    I posted about this in another thread once and you never replied. YOU were the only person using those terms. Google this site for any of those and you’ll see that the Mac users are not calling Windows users idiots. You place your own words into other’s mouths.  Please post an example URL if you find one. Ever instance of name calling that I’ve found in my brief search has been started by you.

    So again, you have not addressed any of the actual arguments presented and only defended your points of view with name called when you know you are wrong.

    Lastly, if you had RTFA, you would have seen that Oligopoly Watch got it wrong. The linked article mentions Bic making ITS OWN RAZORS, not replacements compatible with Gillette. Oligopoly Watch misreported the information.

    This is the link they misreported:,13005,901030428-444963,00.html

    vb_baysider had this to say on Oct 03, 2006 Posts: 243
  • I did a few more searchs. MacGleee used the word “sheeple” once.

    “Lemmings” comes up once in a discussion about a commercial called “Lemmings”. Go figure.

    Now do a search on “drones”, “Mac drones” or “Mac-drone”. It comes up dozens of times… Guess who?  Beeblebrox.  Talking about Mac users.

    Not Mac users talking about Windows users.

    Idiots is used often… but I couldn’t find it used referring to Windows users. Usually, it was used by you or other people calling the “Mac zealots” idiots… not the other way around.

    So… Your point about Mac users constantly calling Windows users names is wrong. It is you, by a wide margin, using name calling.

    vb_baysider had this to say on Oct 03, 2006 Posts: 243
  • PS - If you can, please try to find a comment where I have used such a perjorative to refer to Windows users.

    I’ll save you some time. You won’t be able to.

    vb_baysider had this to say on Oct 03, 2006 Posts: 243
  • ... pejorative ...  Sumtims I tipe to fa$t.

    vb_baysider had this to say on Oct 03, 2006 Posts: 243
  • I just don’t understand why we constantly to resort to name-calling.
    If you disagree with what someone says, why not just say so and say why you think they’re wrong. Why bother making a personal attack? It’s going to do more to prevent people from taking your views seriously. And in my view it’s the most serious hindrance to decent debate that we have on this site.

    If anyone can find places where I’ve been pejorative I’ll apologise for them. It might help us all to be willing to do the same.

    Is it too much to hope we are not yet too entrenched in our mutual aggression to step back and take a breather?

    Benji had this to say on Oct 03, 2006 Posts: 927
  • Thank you, Ben. Well said.

    Janet Meyer had this to say on Oct 04, 2006 Posts: 36
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