Who’s the bully?
I was involved in a heated discussion yesterday about Wal-Mart and Apple and how we we are split on who is the big, bad, ultimate baddie. The arguments go like this (I think):
1) Apple is the big, bad, ultimate baddie because they are setting things up for a supposed monopoly on distribution of movies, not to mention the fact that Wal-Mart is trying to protect their market share.
or
2) Wal-Mart is the big, bad, ultimate baddie because they are trying to control the movie studios to the point of wanting them to set the wholesale price of a movie download equal to the wholesale price they pay for real, physical DVD packages.
My opinion was, of course, number two. But it’s controlling part that I really dislike. I may regret saying it, but no company, including Apple, should have the right to threaten or “dramatically encourage” an industry to move in a certain direction. Wal-Mart should have the right to further negotiate prices, however, it boggles my mind to think that anyone would think that a movie download should be the same price as a physical DVD with packaging and increased quality. Also, I seriously doubt Wal-Mart would be so bold as to send movies back when if they don’t stock them, people will just drive down the road to Best Buy, Target or Circuit City!
It begs the question, is Wal-Mart worried about the insane amount of single-song and album purchases since the iTunes [Music] Store came online? Is this same fear, for that’s really what it is, applicable to their movie sales? I think Wal-Mart sees that at some point in the future, a point that may be 2 years, 5 years or 15 years, the vast majority of people will no longer care to have physical music and movie media. Since they haven’t been able to A) create a viable Netflix alternative and B) create an online music store that garners more than a few percentage points, I’m sure this makes Wal-Mart a little more than anxious.
You may not be a fan of iTunes or of Apple, but I believe there is significant value in being able to download a movie or song whenever you want. The convenience is a big draw to a store such as iTunes and even Wal-Mart’s service. People are willing to watch a somewhat sub-standard definition quality movie if they can get it any time they want, for cheaper than the physical product. Companies *have* to get that, especially since the iTunes Store sold 125,000 movies in the first week, who knows how many they’ve sold now!
Reading Material:
At Ars Tecnica
At BusinessWeek
At TAPPED
Mac Rumors Story: Interesting comments on said story
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