Wal-Mart tries for lead role in movie downloads

Marketplace Staff Feb 6, 2007

Wal-Mart tries for lead role in movie downloads

Marketplace Staff Feb 6, 2007

KAI RYSSDAL: The world’s biggest retailer learned today it’s also the biggest at something else. Though Wal-Mart would probably rather do without this particular honor.

The company’s going to have to defend itself against what will be the largest class action suit ever to go to trial in this country.

A federal appeals court made the ruling. The suit claims as many as a million and a half current or former female employees were discriminated against. The women say they were passed over for promotions and paid less than men were.

The ruling took the wind out of the boost Wal-Mart was expecting to get from its own big announcement this morning. The discount giant’s getting into the movie download business. Three thousand videos, including television shows.

And true to its business model, Wal-Mart’s offering the downloads for less than the competition does. But Pat Loeb reports that doesn’t necessarily mean it’ll be a success.

PAT LOEB:“Mission Impossible” was featured as the top movie on Wal-Mart’s spanking new media download site today, as it announced a deal with six major Hollywood studios to sell their movies and TV shows digitally. They’re the first retailer to do that.

Douglas MacIntyre

, editor of 24/7 Wall Street, says the company goes into the video download business with a big advantage.

DOUGLAS MACINTYRE: Wal-Mart is probably one of the 30 or 40 most visited sites in the world. Period. Walmart.com. So, they start out with a level of scale that some of these sites, like CinemaNow

and movie . . . like, they just can’t match it.

That’s not to say success is guaranteed. Wal-Mart tried to get into the online video rental business a few years ago. It ended up throwing in the towel and directing customers to its rival, Netflix.

And, according to Todd Chanko

, an analyst for Jupiter Research

, there’s a built-in challenge for the service.

TODD CHANKO: Guess what. 92 percent of consumers said that they watch TV shows and movies on a TV. You know. Only 6 percent of consumers said that they watch movies and TV shows on a PC.

Still, Chanko says, if there’s even part of a dollar to be made on video downloads, Wal-Mart’s in a good position to make it.

In Los Angeles, I’m Pat Loeb For Marketplace.

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