Both Apple and Wal-Mart are negotiating with thugs who want $14-17 for a 50¢ piece of plastic! And we all know what a wonderful job Wal-Mart does selling downloads — instead of cotton-poly t-shirts and disposable diapers.

The guy from Bentonville, Ark., surely isn’t on any of Hollywood’s leading man lists. A 23-year Wal-Mart Stores veteran, David Porter is the person at the retail giant who orders DVDs and slashes prices to move them. But this summer, Porter has been one of Hollywood’s hottest acts, taking meetings with top studio brass like a producer with a hot script. His pitch: Wal-Mart isn’t happy.

That prospect tends to send shivers through Hollywood’s Gucci-toed corner offices. As the largest seller of DVDs, Wal-Mart accounts for roughly 40% of the $17 billion in DVDs that will be sold this year, a financial lifeline to big-spending studios. But now Wal-Mart’s video business faces a potential threat by Steve Jobs and Apple Computer, which in mid-September, sources tell BusinessWeek, plans to announce it will start offering movie downloads from its iTunes store.

The notion of kids running around with full-length movies on new, wider-screen iPods that Apple is expected to unveil as well is causing grief in Bentonville, according to Hollywood executives.

What does Wal-Mart want this time to play nice? Executives who have met with Porter say it wants marketing help when it launches its own planned download site. And it wants Hollywood to trim the current $17 wholesale price for DVDs. That would let Wal-Mart slash its own prices to the same $15 or so that Apple would charge. (The plan is for Apple to pay a $14 wholesale price for new releases, say sources, although negotiations continue.) A large wholesale cut for Wal-Mart, of course, would amount to hundreds of millions in lost studio revenues each year at a time when DVD sales are slowing.

Wal-Mart isn’t the only issue that’s giving some studios pause. Several are concerned about Apple’s rules for using iTunes, which let users watch a film on up to five different devices. And others worry about letting Jobs set a download price they can’t change, as he has done in music. Still, studios have embraced the digital concept and accept some “burning” of movies to DVDs.

  1. malren says:

    The Wal-Marts in one state sell more DVDs in a week than Apple will sell movies in a month. They’re only getting into downloads as a first step toward the day when all content is digitally delivered.

    As for the whole concept…I love being on the bleeding edge, but no frigging way am I paying close to retail for highly-compressed digital movies loaded with DRM. I don’t care if Apple, Wal-Mart or Jesus is seling them. If those are the prices, count me the hell out. I’d rather be branded a thief and download stuff from Usenet or the Russian mob.

  2. moss says:

    malren — your 1st paragraph is the kind of self-reassurance Wal-Mart executives yelped when iTunes started. Before they lost a significant chunk of market share to Apple.

    I certainly agree with the premise of your 2nd paragraph — though not the “solutions”.

  3. John says:

    Why would you even want to buy this crap? Most of the new movies I wouldn’t want to watch for free let alone pay $17 for. And I can count on one hand (with fingers left over) the amount of movies that I would want to watch more than once.

    Netflix had the best model for content delivery; but with their throttling practices It was getting to the point of one disc per month for me.

  4. Mike Voice says:

    The price Apple hopes to charge, now set at $14.99 for new releases and $9.99 for older movies, has risen from Jobs’s initial plan to offer new flicks for $9.99, say industry insiders

    $0.99 per song
    $2.99 per episode
    $9.99 per movie

    Steve’s team seems to have a handle on what a significant section of the market will tolerate…

    $14.99 per movie… and its not even HD? Bite me!

    Wholesale price of DVDs is $17?

    WalMart pays $17 for each DVD it buys???

  5. DogWings says:

    Much ado about nothing.

  6. gquaglia says:

    This is how it should be. The market sets the price, not the scum bag studios. Economics 101. Bravo Steve Jobs and Wallmart.

  7. JoaoPT says:

    Can you spell Mo No Po Ly…

  8. Geoff says:

    I don’t care what they do because I will never shop at Wal-Mart.

  9. JoaoPT says:

    or C a r t e l … or corporative interest… or what?
    Surely there’s no free market in here. Once a Studio starts cutting price in sake of competition, they all start and prices get to 4.99 for a download of a single flic and 9.99 for plastic with extras. That’s what I would call fair. But no! MPAA will see to it…
    Only if the independants would start to think they need money cows instead of only “author” movies… Were was the last time we had an independant blockbuster? Indie will be the only way to foster competition. Well, piracy is helping too, they really cut down prices in china for DVDs… or else no one would buy one.

  10. Pfkad says:

    Mike (#4) is right. Neither the MPAA nor the RIAA seem to understand it’s price point, price point, price point. I stumbled across a John Mayall CD on Amazon for $6.99 and I snapped it up without a thought. If it had been $16 I would have agonized for a while and then probably passed it over and stuck with my vinyl copy.

  11. Mr. H. Fusion says:

    I agree with #3 John. There just isn’t that many movies worth watching, let alone buying.

    Given the choice, I would rather buy then rent. That way we can watch at our convenience. If we liked it we can always watch it again later or even lend to a friend with a recommendation.

  12. AB CD says:

    You consider studios to be thugs, and DVDs to only be worth 50c?

  13. sdf says:

    There’s plenty of great movies coming out these days – the problem is that they’re not at the multiplex, there aren’t posters on the buses, no tv ads, no magazine spots. it’s a pain in the ass trying to find something worthwhile and easier to drop $10 on Die Hard 6 and say movies have gone to hell.

  14. OmarTheAlien says:

    The CD/DVD will soon be as the vinyl record; broadband downloading will eventually spell it’s demise. The next big battle will be how much and what flavor DRM is included with the download. I think it’s a very real possibility that entertainment distribution will evolve (devolve?) towards large, ad supported sites where the end user gets the product for free. The big studios, should they even survive, will likely support these sites. Indy artists, on the other hand, will simply run their own, ad supported, sites.
    If the Muslims and Christians manage not to blow up the damned planet in the next few years they should be interesting times indeed.

  15. C0D3R says:

    Relax. People were once fearful of the clout held by Montgomery Wards and Sears and Roebuck. Back then we were just as doomed by them as we are by Wal-mart today.

    You don’t neccessarily compete wth Wal-mart on price. Nor do you compete with movies on price. If you think price is the only game in town, I have some VHS tapes of Hollywod’s finest ovies I’ll sell you for a quarter apiece. Those are movies, and cheap. Why am I not crushing Wal-mart?

  16. A pissed off mac user says:

    You have got to be kidding me who wants to read this bullshit blog anymore. All this dumbass Dvorak wants is more site traffic for advertisements. I have proof here.

  17. Lamar Cole says:

    Life doesn’t get any better than a cold Coca Cola and a trip to Wal-Mart Heaven.


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