Wal-Mart sells 40 percent of all DVDs–Hollywood’s biggest revenue source. That’s right, 40 percent. So it’s no wonder that the studios don’t want to ruffle any golden-goose feathers. And it’s no surprise that we’ve read reports that Wal-Mart (and other retailers like Target) have been clear in letting studios know that an irresistible digital movie-buying system would not be appreciated by the bricks-and-mortar companies that sell actual disks. Is Hollywood listening? For whatever reason, legally downloading a movie is a much worse proposal than schlepping to the store to buy the DVD.
But now Wal-Mart is itself offering a hefty catalog of movies online, and guess what? It still makes little sense to buy a movie on the Internet. Particularly not at this point from the Wal-Mart service, which seems to be suffering birth pains in its current beta incarnation. In my case, it took 78 minutes on the phone with a smart customer-service rep before I could successfully begin downloading “The U.S. vs. John Lennon,” for which I paid $14.88. (Later in the week Wal-Mart released a new build of the software that fixed my particular problem.)
Those technical difficulties are associated with the ridiculous necessity to play back movies with specialized software, because of digital rights management (DRM) requirements. Though the overall experience is much better in time-tested systems like iTunes, onerous copy-protections rules affect all legal movie downloads. Wal-Mart’s rules are especially infuriating: you can watch a movie only on the computer you use to download it. (iTunes allows you five.) An alternative is to buy a version that lets you watch it on certain portable devices, but not iPods. But that means the movie won’t look good if you play it on your computer. In contrast, a DVD plays on any computer or television in high quality, and friends and family members can borrow it.
Also, online movies do not include any of the bonus content that routinely comes with DVDs. Burning the file to a DVD is OK for backup, but the disk won’t play on a computer or television set.
Then there’s the price (from $7.50 to $19.88), which is high considering there’s none of the cost in shipping a physical product. While some newer online movies cost a few dollars less than the DVD, there is no digital equivalent to the dozens of flicks that you can often snatch for five bucks or less in discount bins.
In short, even the entrance of Wal-Mart into the marketplace has not changed the fact that you’re better off with the old model than the new. Wal-Mart’s Kevin Swint lays this directly at the feet of Hollywood. “The studios set the pricing,” he says. As for bonus content, “that’s the way the studios provide the content.” And, of course, it is the studios who set the rules for copy protection.
Eventually, predicts Ashwin Navin, cofounder of BitTorrent (the peer-to-peer technology company that is expected to announce its own legal download service this month), “You’ll be able to purchase movies without DRM at a much more reasonable price. And a lot of downloaded movies will be free, supported by ads just like movies on television.” This bright future will come if and only if the studios embrace it–and fear of Wal-Mart doesn’t stop them.
