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Retailers Pressure Studios on Web Deals

Zonk posted more than 7 years ago | from the gotta-get-theirs dept.

202

mikesd81 writes "Over at the Associated Press, there's an article about retailers pressuring movie studios for the same deals that online servies are getting. Target has sent a letter warning 'that Target might have to reconsider the amount of shelf space allocated for movies if studios undercut the wholesale price of DVDs by giving online services a better deal on digital offerings.' At issue is the low price some studios charge for films downloaded through such fledgling services as MovieLink, CinemaNow and Amazon.com's recently launched video store. The two-disc rerelease of Disney's 'The Little Mermaid' now retails for $14.87 at Wal-Mart and $14.99 at Target. The movie can be bought for $12.99 on iTunes."

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In other news... (5, Funny)

LordEd (840443) | more than 7 years ago | (#16377643)

Retailers want money, shoppers want deals, and cats want all your base. News at 11:00.

Re:In other news... (2, Funny)

tygerstripes (832644) | more than 7 years ago | (#16377737)

Then these web-vendors must be stopped - FOR GREAT JUSTICE!!!

Finally, a taste of their own medecine (5, Insightful)

tentimestwenty (693290) | more than 7 years ago | (#16377647)

Target and Walmart have been undercutting stores since they opened by monopolizing distribution. Now they're going to get a taste of their own business model.

Re:Finally, a taste of their own medecine (2, Insightful)

flight_master (867426) | more than 7 years ago | (#16377779)

I agree with you, and I find it rather interesting that Wal-mart (up here, we don't have Target, so I can't speak about them) is complaining about being under-cut. I've seen many small shops close up since they've been in this town. Glad to see they're getting some 'competition' on their terms.


Christian

Re:Finally, a taste of their own medecine (1)

truthsearch (249536) | more than 7 years ago | (#16377817)

The iTunes Music Store's business model is to pressure manufacturers to drastically cut production costs, undercut prices offered by smaller businesses, and compensate employees as little as possible? That's news to me. I thought it was to provide content for the sale of iPods and Macs. Silly me.

Re:Finally, a taste of their own medecine (1)

jZnat (793348) | more than 7 years ago | (#16378505)

Nah man, they're just undercutting them, and that's what Walmart and Target did. iTS can do that without having to lay off people and whatnot.

Yes, Apple does the same thing, ... (1)

AHumbleOpinion (546848) | more than 7 years ago | (#16379375)

The iTunes Music Store's business model is to pressure manufacturers to drastically cut production costs, ...

Given the iTMS goal of selling iPods, the yes. Apple does that with iPods.

... undercut prices offered by smaller businesses, ...

iTMS does that directly, it is not a profit center itself as it is a marketing vehicle for iPod. Hence the 0.99 price, and low margins. Operating at or slightly over cost.

... and compensate employees as little as possible? That's news to me.

iTMS does that indirectly. Apple does that with iPods. Did you miss the outsourcing and sweatshop articles? Now I am not saying that Apple knowingly operated sweatshops but when you outsource you take that risk. It is sadly necessary for a corporation to have its own people on-site to monitor compliance with local laws and contractual worker treatment agreements.

I thought it was to provide content for the sale of iPods and Macs. Silly me.

Yes, your post was silly. If you put the koolaid down and dig a little deaper ...

Re:Finally, a taste of their own medecine (4, Insightful)

coolgeek (140561) | more than 7 years ago | (#16377839)

I don't see any problem with the studios offering the same price for a movie to these retailers, for the same product. But a DVD is not a digital download. There is no reason they should expect a lower price on a physical DVD, there are additional manufacturing, warehousing, handling and shipping costs. This is just some old tired dogs trying to hang on to the past. We never heard them complain about the cable companies getting a lower price on movies...

Re:Finally, a taste of their own medecine (0)

Anonymous Coward | more than 7 years ago | (#16378053)

well, with the itunes versions being on DRM lockdown, and dvds being able to be played on any dvd player they (B&M retailers) should market against itunes and the likes by mentioning that fact. Join us in the fight against DRM people! I would pay an extra dollar per DVD if they would help fight them.

Re:Finally, a taste of their own medecine (2, Interesting)

hcob$ (766699) | more than 7 years ago | (#16378195)

well, with the itunes versions being on DRM lockdown, and dvds being able to be played on any dvd player they (B&M retailers) should market against itunes and the likes by mentioning that fact. Join us in the fight against DRM people! I would pay an extra dollar per DVD if they would help fight them.
Silly me, I thought that DVD's were DRM'd(encrypted). But a fallicous argument never stopped the US Consumer from listening.

Re:Finally, a taste of their own medecine (3, Informative)

drinkypoo (153816) | more than 7 years ago | (#16378447)

Silly me, I thought that DVD's were DRM'd(encrypted). But a fallicous argument never stopped the US Consumer from listening.

CSS is a kleenex. You can sneeze a hole in it.

The actual problems with copying DVDs are the ways they deviate from the standard in order to make the DVD unrippable.

Philips actually came down on some people for using the COMPACT DISC logo on CDs mastered some funky way to make them not be rippable (without using a data track, they were unreadable in data drives, but worked fine in audio) and told them they had to unfuck the CD or stop using the logo or get sued. Not sure how it all fell out though. But regardless, the DVD consortium, if it had any integrity which we know it doesn't, would be doing the same thing.

Re:Finally, a taste of their own medecine (1)

hcob$ (766699) | more than 7 years ago | (#16378957)

CSS is a kleenex. You can sneeze a hole in it.
True, it's easy to break. But I was thinking in more /. terms: "It has DRM... regardless of how easy it is to break, it has DRM." I mean, look at iTunes. They even TELL you how to break it and people still don't like apple for selling "DRM Crippled" Music.

Re:Finally, a taste of their own medecine (1)

drinkypoo (153816) | more than 7 years ago | (#16379013)

No, they do not tell you how to break it. In addition, you cannot circumvent it. Oh sure, you can burn the song to a CD, then re-rip it, losing quality in the process - this does not circumvent the DRM. Circumventing the DRM would result in a non-DRM file with no loss of quality. I can re-rip the song through the analog hole, too, and this is really no different except the specific source of the loss of quality.

Re:Finally, a taste of their own medecine (1)

hcob$ (766699) | more than 7 years ago | (#16379267)

I can re-rip the song through the analog hole
Off Topic:
I always find it funny that the RIAA is trying every way possible to plug the anal log hole. At least they could start putting small packets of vasoline in every CD for when they finally come after you.

Re:Finally, a taste of their own medecine (3, Informative)

r3m0t (626466) | more than 7 years ago | (#16379503)

They stopped using the logo.

Re:Finally, a taste of their own medecine (1)

Technician (215283) | more than 7 years ago | (#16377871)

Target and Walmart have been undercutting stores since they opened by monopolizing distribution. Now they're going to get a taste of their own business model.

The article is missing the point that one is apples and one is oranges. The used Apple product can't be put on Craig's list or E-Bay. A physical product can.

Would you like to get a film for $15 and resell it used for $8 when you are done, or pay $13 and have it die with your hard drive?

This is one of the factors why online digital sales are still behind brick and mortar retail sales. Online downloads do not provide tangable merchandise. What's next, Pay per View on cable has to be sold at retailers DVD prices?

Huh?? (5, Insightful)

joshetc (955226) | more than 7 years ago | (#16377669)

Wasn't it the distributers that said the cost of the media and packaging made up a great deal of the cost of DVDs? I'd say the retailers are getting a pretty good deal with only $2 difference between the DVD + packaging + extras vs just a video file.

Re:Huh?? (2, Interesting)

Jonny_eh (765306) | more than 7 years ago | (#16377799)

Bandwidth and server maintenance costs too, albeit not nearly as much as DVD packaging/shipping. Or does it?

Re:Huh?? (3, Insightful)

Mr. Underbridge (666784) | more than 7 years ago | (#16377843)

Bandwidth and server maintenance costs too, albeit not nearly as much as DVD packaging/shipping. Or does it?

Nowhere near. And if you're counting server maintenance, add the cost of the store, theft of stock (that gets passed on to the consumer too), and employee salaries, all of which cost much more for a real store.

Re:Huh?? (1)

n2art2 (945661) | more than 7 years ago | (#16378229)

Could just be me, but I'm guessing that the studios are not paying for the server and maintenance costs, but the online stores themselves are covering those costs, as a cost of their business model. That is non-related to the cost of the product being sold the said retailers.

Think about it this way. . . . Target orders 500 DVD's of a new release to stock on it's shelves. Apple orders 1 digital copy of the same release to host on Apple's servers, and to resell on itunes 500+ times, then just cuts the studio a check for the total of number of copies purchased.

Which model costs more to produce and distribute??????? Target has to pay up front for whatever quantity of movies they want to stock. Normally, if they don't sell them, there is a slim chance they will get the investment back, and be able to send the DVD's back. However with the online model, there is no stock needed to be purchased, and it is much cheaper for the studio to send the release to the online retailer's servers. So it is cheaper for the studios and it is cheaper for the online retailers as well.

And if Target and Walmart stop stocking the releases, do you really think people will stop buying them????? Heck no. They will look for another distribution source. And what does that mean for the online retailers?????? More business!

SOP (4, Informative)

NineNine (235196) | more than 7 years ago | (#16377675)

Standard Operating Practice. I own a retail store, and this happens every day. Manufacturers have to be very careful not to undercut their brick-and-mortar retailers, else they'll lose them. I did the same thing just last week. I found one of our manufacturers selling their products at my wholesale cost online. I told them that they need to fix that, or I'll dump the products. As is, I have customers coming in asking me why we're more than the website, and why they should bother shopping at my store if I'm going to rip them off. Manufacturers can never undercut their retailers (or let one retailer grossly undercut another), otherwise they risk losing them. And, without the retailers, they're dead in the water.

Which business are you in? (1)

tentimestwenty (693290) | more than 7 years ago | (#16377727)

I don't know which business you are in but it must be large and you must have some power with your manufacturer. Most businesses have long since left private one-store retailers for the bigger chain stores, especially in terms of music, movies and computers. Any small store that tries to "drop" a product which is being sold lower online or to a bigger store just gets a curt "thank you" from the retailer.

Re:Which business are you in? (0)

Anonymous Coward | more than 7 years ago | (#16378457)

Don't let him fool you... he owns a Head Shop.

Re:SOP (1)

jellomizer (103300) | more than 7 years ago | (#16377761)

So with logical conclusion if these Brick-Mortar company refuse to sell these products because the web undercuts them then there will be a point were the Brick-Mortar will not have anything to sell. Still the iTunes price vs. the DVD price isn't much of a difference. Still as of right now most people want a DVD to play on their TV not on their Computer Screens. As well DVD Quality is a bit higher then iTunes, You have physical medea which you can touch and bring to families homes to watch, together. Retailers shouldn't worry to much right now about iTunes, killing there market and the last thing they should do is say no to Disney because with all the effort Disney advertises their products not having it availaible will only stop sales not expand them.

Re:SOP (1)

SteveXE (641833) | more than 7 years ago | (#16379149)

"DVD Quality is a bit higher then iTunes"

Who are you kidding a bit higher? DVD is alot higher then itunes. Have you ever tried to upsample a itunes movie to 720p or 1080i? It looks like someone vomited on your screen but do the same thing with a DVD and it actually looks better then it did at its native resolution.

Online movies less valuable to the consumer (4, Insightful)

interiot (50685) | more than 7 years ago | (#16377811)

And online movies are less valuable to the consumer. Consider:

  • They don't get the box art
  • The video download is almost certainly much more compressed than the DVD version

If there's a difference in value to the consumer, it only makes sense that there would be a (small) difference in price.

Re:Online movies less valuable to the consumer (1, Informative)

Anonymous Coward | more than 7 years ago | (#16378263)

You forgot the main one, the downloaded file does not create a disk that can be played on any DVD playback device. Unless these files can be used on regular consumer DVD players connected to TVs or portable players, they'll only be bought by a niche market.

Re:Online movies less valuable to the consumer (1)

nutshell42 (557890) | more than 7 years ago | (#16378287)

  • You have to pay for the transfer (even if you don't pay per GB your ISP nevertheless will get their money back somehow)
  • You have to pay for disk space and a backup medium
  • You take the risk of the online store going belly up and "your" movie collection becoming suddenly useless
  • DRM makes sure you can only watch the movies on your PC, postage stamp size, without pausing, no more than 3 times a month, only the week before a full moon.

I won't "buy" (acquire limited usage rights as granted by the copyright holder subject to change without notice) a movie online unless they either get a *lot* cheaper than the DVD or they rethink the whole DRM PoS

Re:Online movies less valuable to the consumer (1)

norminator (784674) | more than 7 years ago | (#16378383)

Considering the fact that most online movie sellers don't allow you to burn your movie to DVD, and are very limiting on how or whether you can play that movie on other computers, or on TVs, I'd say you've overestimated the value of online movies.

With Apple's set-top box, that'll change a little bit for their store, since you'll be able to stream movies to your TV, but that's still a huge pain, considering you'll need a $300 box per TV to be able to do that. And considering there's still no other way to get the video to a TV (other than an iPod with the video out), and you still can't burn it to a disc. Amazon's service is even more difficult to work with.

Re:Online movies less valuable to the consumer (1)

porcupine8 (816071) | more than 7 years ago | (#16379717)

Don't forget all the extras most DVDs come with. If you actually like watching the deleted scenes, outtakes, etc etc, that can add a lot of value to the disc that you don't get just d/ling the movie itself.

Re:SOP (3, Insightful)

Lumpy (12016) | more than 7 years ago | (#16377897)

good luck. Panasonic recently screwed every store owner selling their plasmas. I'm an integrator and sell Panasonic 50 inch and large plasmas to my customers wanting built im goodness in their $3,000,000+ homes, but if they can get that same TV at below my cost online they do raise eyebrows.

We asked panasonic and they told us to pound sand, if I was willing to buy 10,000 set's they would give me a deal.

You are trying to fight against massive volume and you will never win. Granted the dumb consumer will buy the $600.00 lower priced plasma from some e-tailer, spend $350.00 in shipping to get it to him, and if he has any problems we gladly help at the tune of $120.00 an hour because it was not purchased from us, or it's actually a different model shipped to them so it does not fit the hole we made, does not have RS232 for crestron integration, lack discreet IR codes, etc.... so it either get's sent back for antoher $180-300 in shipping or we do a change order to modify for the new device and end up charging for 2 hours of programming, labor and materials.

so in the long run they saved nothing by buying it below my cost elsewhere. But then most consumers are not that bright to begin with. they see a shiney at low-low prices and ignore all the added expenses.

Re:SOP (0)

Anonymous Coward | more than 7 years ago | (#16378059)

And most brick-and-mortar retailers are so scared to death of the fact that consumers are smart enough to get the best deal for their money (and now have the tools to do so), that they try to perpetuate myths like the nonsense you're spreading here.

Re:SOP (4, Insightful)

jedidiah (1196) | more than 7 years ago | (#16378359)

No. Consumers are generally interested getting a percieved bargain at the expense of all else including longterm actual cost (the monthly payment mentality), features & incidental costs like shipping or shipping time.

This is why Detroit and Redmond are still in business and why Walmart does so well.

Re:SOP (1)

TheWoozle (984500) | more than 7 years ago | (#16377941)

As is, I have customers coming in asking me why we're more than the website, and why they should bother shopping at my store if I'm going to rip them off.

Then you shouldn't have any problem keeping them as customers. It's simple: ask them how much they will pay in shipping (I bet they'll be surprised that the website really isn't any cheaper after they add in shipping). Ask them if they prefer to wait 5-7 business days for their purchases.

Also, perhaps you should consider not stocking items for which people *are* willing to shop online, and concentrate on items which people are more likely to want to have immediately upon purchasing. I know that I'd hate to have to wait for my toilet paper to arrive via UPS ground.

Re:SOP (0)

Anonymous Coward | more than 7 years ago | (#16378045)

You want toilet paper immediately upon purchasing? Uh... how soon are you thinking of using it? Couldn't you at least wait until you got it home?

Lots of people actually do purchase their toilet paper online, at least in the UK where online grocery shopping does work.

Re:SOP (1)

Lazarian (906722) | more than 7 years ago | (#16377943)

Hmmm. That kinda makes for a different perspective on the Wal-Mart is Evil* thing.

*I still think they are, but that's beside the point.

Re:SOP (1)

14CharUsername (972311) | more than 7 years ago | (#16377991)

Without products to sell the retailers are dead in the water.

Re:SOP (1)

mcmonkey (96054) | more than 7 years ago | (#16378087)

And, without the retailers, they're dead in the water.

And where are you without manufacturers?

I understand your interest in not having manufacturers cut out the middle man, but don't forget that's exactly what you are--a middle man. It sounds like both the manufacturers and your customers are questioning the value you add to the transaction. You'd better have a good answer if you want to stay in business.

So what was you answer? Why should customers bother shopping at your store?

Re:SOP (1)

NineNine (235196) | more than 7 years ago | (#16378575)

We offer service. The things that I sell are relatively high end. A few manufacturers have tried dumping into the big box stores, but with bad results. With no sales people, their products simply don't sell. And once they've pissed off the smaller guys, like me, who provide service and sell their stuff, they're pretty much screwed. Maybe this works if you're selling identical, commodity items, such as movies, but for many other products, you can't do this. Going from independent retailers to Big Box is risky as hell, and it often doesn't work out well, especially for manufacturers that don't manufacture bottom-tier stuff. You have to put all of your eggs in one basket, and that's a very low margin basket that can completely kill your product at will.

Re:SOP (1)

Jeff DeMaagd (2015) | more than 7 years ago | (#16378493)

The problem is that anyone that thinks that a downloaded movie file is comparable to its DVD counterpart is, quite frankly, delusional. It's not undercutting because it's not the same product, not the same quality and certainly not the same level of features. The iTunes version doesn't offer 5.1 audio, multiple audio tracks, any subtitle or caption tracks, any interactive features, no commentary, no bloopers/outtakes, music videos, interviews or anything like that, just a more heavily compressed video file with one stereo audio track. Heck, they can only be played on one brand of portable media players, whereas with DVD, you can pick from any portable DVD player. Maybe there are people that don't care about those differences.

Re:SOP (1)

vanyel (28049) | more than 7 years ago | (#16379541)

I worked for "a large chipmaker" which had the same problem when they dabbled in the retail market, vs their typical OEM channels.

In this case, it really pisses me off as a consumer. These are different products with different costs and different benefits. It's even worse in the ebook business: a large number of the books I want to buy in e-formats are being sold at *hardcover* prices. It is absolutely inexcusable to make the consumer pay for the production costs of a book when there are essentially no production costs. ebooks should be priced slightly lower than paperbacks, though I'm willing to pay paperback prices for the convenience of access. But because of this same nonsense, they're preventing the consumer (or at least a subset of them) from getting what they want.

What they *should* be doing, if they want to compete, is put up kiosks where you can plug in your device and download on the spot at local speeds. They could get the product at e-prices and compete, they get the consumer's impulse shopping from seeing the product (or displays), the consumer gets instant downloads (and for movies in particular, even with cable and DSL, local is going to be much faster). It would be a win for everyone.

WTF?!?! (4, Insightful)

ImaNihilist (889325) | more than 7 years ago | (#16377681)

PROBLEM: People are paying 25% less for a product of inferior quality. Wait...what's the problem? Shit on iTunes is still way to expensive considering the inferior quality, no hard copy, and the inability to burn to disc. Why don't they just stop playing around, and come up with a unified pricing model for all media. CD, DVD, iTunes, Amazon - $9.99. Make everything $9.99 and I'll go on a buying spree right now. I'll spend $1,000 in the next 20 minutes.

Re:WTF?!?! (1)

rf0 (159958) | more than 7 years ago | (#16378015)

The thing is with most of the population they want to show off what they own and like to have a tangable good. I can either hold up my hard disk and say I've got 1000 MP3's / 50 movies on here in a sub format or have the DVD's and CD's on a shelf what I can take with me if I want to or lend to a friend. Also the physical formats are a lot harder to destory. It doesn't take much to delete a digital copy..

Re:WTF?!?! (3, Insightful)

Rob T Firefly (844560) | more than 7 years ago | (#16378251)

Plus, I can throw my DVD into a DVD player, computer, games console, or whatever else comes out in the future to support the format. I can enjoy whatever special features and extras are thrown in to appeal to my movie-geek side. I can even rip media from a DVD and freely convert it to any digital format I could ever want, in order to transfer to whatever video-playing gadgets I desire, and with no loss in quality other than what I dictate in the settings. And, I'm able to do this all from a physical medium that I only pay for once and for all, and that (barring accidents) will probably be around and viable longer than I will.

Can you say the same for any file on a hard disk, DRM'd or not? My oldest DVDs have outlasted something like five or six failed hard drives at this point, and I was a relatively late adopter of DVD.

Re:WTF?!?! (1)

hoggoth (414195) | more than 7 years ago | (#16379001)

> the physical formats are a lot harder to destory. It doesn't take much to delete a digital copy.

You must not have kids.

About 50% of my physical DVDs have been destroyed beyond usability by my kids scratching them when inserted and removing them. I've paid the Disney tax more than once for the same material.
So far my kids haven't managed to damage a single bit of the movies on my file server.
Oh, and for those that say when the hard drive goes so does all your media, don't be an idiot. Make backups.

... and the choir shouts Hallelujah! (3, Insightful)

FellowConspirator (882908) | more than 7 years ago | (#16378141)

Seriously. The $12.99 you pay for the video download thorough iTunes is a rip-off. The video resolution and quality is inferior, you don't get the extras, you don't even get to burn it to a DVD so the kids in slap it in the DVD player in the car/living room. People are paying a little (20% less) because they are getting MUCH less (1.4G of movie versus 18G of movie -- can't play on standard equipment).

I'm not saying that $15 is a fair price for a DVD either. It costs the manufacturer, last I heard, about $2.50 for the DVD and packaging (including the DVD production costs, discounting the original film production cost which is, on average, fully recouped during its theater run).

Heck, if net-neutrality really disappears, the cost of the iTunes download may skyrocket. I can't blame Target and Walmart for trying though. It's all about putting the squeeze on the vendors.

Re:... and the choir shouts Hallelujah! (1)

misleb (129952) | more than 7 years ago | (#16378255)

People are paying a little (20% less) because they are getting MUCH less (1.4G of movie versus 18G of movie -- can't play on standard equipment).


18G of movie (HD-DVD/Blu-Ray) can't play on "standard equipment" either. :-p

-matthew

Re:... and the choir shouts Hallelujah! (1)

FellowConspirator (882908) | more than 7 years ago | (#16378301)

2 DVD9s (what you get in the package from Target, 2x9G=18G) do play on standard equipment. The iTunes download, however, will not.

Re:... and the choir shouts Hallelujah! (1)

jedidiah (1196) | more than 7 years ago | (#16378419)

Sure it can. While the encryption on HD DVD's may not yet be broken, they are at least open standards meant to be used by a variety of manufacturers.

Compared to the "only Apple Corp and no one else" nature of iTunes, it's almost GNU.

There WILL eventually be an in dash HD-DVD or BlueRay DVD player for my car just like there's an in-dash old style DVD player in there already.

No such "iTunes" device exists. At best, some car stereos offer "integration" with the only vendor's devices.

2 bucks for a case? (5, Insightful)

Fahrvergnuugen (700293) | more than 7 years ago | (#16377693)

Doesn't it seem reasonable that a downloaded copy should be a little bit cheaper than a physical copy? I mean after all, when purchasing a downloadable copy of a movie you save the cost of:

  • Stamping the disc
  • Printing the cover & case insert
  • Shipping the DVD through the distribution network
  • Stocking the item
  • Paying a clerk to check the item out

I'm sure there are more savings, those are just the few real obvious ones.

It sounds to me like the Tar*Mart's of the world are just being greedy.

Re:2 bucks for a case? (1)

Chanc_Gorkon (94133) | more than 7 years ago | (#16379269)

They are being greedy and also focused on the one part that DVD's have....the movie. The only thing iTunes has that a DVD does is a inferior copy of the movie. When you buy DVD's, you get so much more. You get menus and other content you simply do not get on the download. You get making of clips and many things that some people do not like, but I personally think is worth the extra 2 bucks.

Its an issue with obsolenence (3, Insightful)

Moby Cock (771358) | more than 7 years ago | (#16377697)

I am becoming increasingly frustrated with big companies whining when technology renders their business model obsolete. If Wal-Mart and Target want to retail movies, then do it in the manner that consumers want. Whining that a competitor is better at it is just sad.

Good companies evolve and move to where the markets are, they don't cry about how they are so hard done by because a competitor has them beat.

Re:Its an issue with obsolenence (1)

sterno (16320) | more than 7 years ago | (#16377781)

I'm sure they complained to the buggy whip manufacturers too. I think in the end though these are empty threats. The truth of the matter is that DVD's get people into the store. Getting somebody in to buy a single DVD leads to two or three or maybe a new DVD player or clothes or whatever else. It's like the milk in a grocery store.

Lest we forget, Walmart and Target both sell CD's in their stores still even though downloading music is a very established business. This is a negotiation tactic, trying to use their current market position to get a better deal out of the movie studios. If they can get the studios to drop the wholesale prices a $1, it would be a huge boost to the store profits.

Re:Its an issue with obsolenence (1)

Moby Cock (771358) | more than 7 years ago | (#16377869)

I think what you say is true, and it sheds light on just how empty the threats by Target et al. are. They need to stock DVDs just as much as the studios need them too. By threatening to reduce 'shelf space' without a better deal is just bullshit posturing. The consumers don't really care who sells them DVD, they just want the content. If they have to get it online, well, so be it. And, as you say, this will hurt Target rather than the studio, since they won't be picking up other items in the store.

Re:Its an issue with obsolenence (1)

balsy2001 (941953) | more than 7 years ago | (#16378501)

You still have a choice. It is the same one you always have. To buy or not to buy! If you don't like the prices (i.e., that movie isn't worth that much to you) keep your money and move along.

Re:Its an issue with obsolenence (2, Insightful)

SnowDog74 (745848) | more than 7 years ago | (#16377873)

True but in the real world, ego stands in the way of sound business decisions. Men who wield power do so by applying their own version of the Reality Distortion Field to their otherwise commonplace ideas, regarding themselves as innovators for having re-invented the wheel for the umpteenth time.

The problem is that great ideas are hard to come by, and "insanely great" ideas are extremely rare... So, when a leaner, more agile company that operates according to this economy of scale comes along and tosses aside the "throw shit to the wall and see what sticks" business model, much to the befuddlement of many men who were utterly convinced that many mediocre ideas are more profitable than a few brilliant ones, they're very threatened.

They're not threatened monetarily... Bill Gates is still and will still be the richest man in the world. But he will never, and can never, be successful at the economy of scale that Steve Jobs has been... and, perhaps more importantly, he doesn't possess at all any of the brand image or personal image that Apple and Steve Jobs hold in the marketplace of ideas... and that has been a point of contention between the two for a very long time.

Most men, though they get older, do not get wiser... and this is why grown men in their 40s, 50s and beyond, running mega-corporations, continue to let their egos drive them down the abyss of terribly myopic business strategies.

Same reason RIAA and MPAA hurl lawyers at 12-year olds. Figuring out how to make brilliant movies is harder... much harder. Figuring out how to make a business case for their own companies when the internet renders recording companies and motion picture distributors unnecessary is simply beyond the capacity of these used car salesmen.

More than piracy, more than losing retailers, more than losing money, what frightens the modern corporate executive is the possibility of being unimportant.

Re:Its an issue with obsolenence (0)

Anonymous Coward | more than 7 years ago | (#16377949)

The problem is that the average consumer (especially the ones that frequently shop at Target and Walmart) isn't likely to care. These consumers haven't asked for digital movie downloads. The industry is embracing it because they want to make pressed DVD's go away so that they can charge you the same amount of money while giving you LESS--thereby enabling them to make more money.

It's been established. The DVD's you buy from the store are different from the DVD's you buy online. You don't get the same high quality video/sound, and you most definitely don't get extras. The average consumer isn't going to see the difference because they DON'T have the equipment to notice.

If anything, the prices for downloads are too high for what you get. But that is the store's problem.

Re:Its an issue with obsolenence (4, Insightful)

swillden (191260) | more than 7 years ago | (#16377961)

Good companies evolve and move to where the markets are, they don't cry about how they are so hard done by because a competitor has them beat.

Smart companies evolve and move to where the markets are *while* crying about how they're being abused, in the hopes that it will slow down the movement enough that they can stay ahead of it.

Not saying it's "right", but it's reality.

Re:Its an issue with obsolenence (3, Insightful)

Vokkyt (739289) | more than 7 years ago | (#16378119)

If Wal-Mart and Target want to retail movies, then do it in the manner that consumers want. Whining that a competitor is better at it is just sad.


Except that they are already doing it in a way the consumer wants. No, really, they are. Most consumers do not want to watch a .avi or .mp4 file on their computer; they want a physical DVD to pop into the $20 DVD player they bought at Target/Wal-Mart the week before. This is what I really don't get in all of this; Target/Wal-mart and any other retailer in the business is not really going to lose a market share it that it didn't already have before. There may be a minor loss, but the fact is that they are talking about two completely different products and two completely different consumer mindsets. When I think about the digital download services vs the DVD format, I think about who would purchase which. Take my Dad, for example. He's a pretty tech savvy guy for his age, and though he isn't out there downloading movies off Bit Torrent, he does hate paying $20 for a movie with includes three different language options and subtitle options, 5.1 surround sound options, wide screen vs full screen options, and the gillion little extras that come on a DVD. When he heard that iTunes and other services were offering you a movie, plain and simple, he was all ears. He is the target consumer for digital download services. Consider my Mom; she isn't as tech savvy, and enjoys all the extra features that come on DVDs. In fact, it's part of the reason she buys DVDs. You think you could get her to watch a full movie on a computer screen? Hell no. Unless it was a media center PC, she has no interest in it, since it's too much work just to watch a movie. This is the difference in consumer that I think Target/Wal-mart fail to see, and what they don't understand when they complain about digital download services.

Though I agree that Target and Wal-Mart are being very childish in this manner, the fact is that capitalism has never been a fair playing field, and this is sort of what it's all about. The fact is that the digital download services offer almost completely different content; their target audience is different, the intended market is different. Instead of whining about under-cutting their sales, the DVD retailers should promote their strengths; extras, language options, no need to download, etc, while they start making their own movie service options. Take the time to build business plans now while other companies deal with a relatively new plan (in a sense...), wait until broadband is better able to handle the movie downloads (speeds mainly), and then jump right in with both a digital service and also a "just the movie" DVD service in stores. Watch as the playing field suddenly falls into the retailers' favor again, as they hold both markets once more.

haha (-1)

Anonymous Coward | more than 7 years ago | (#16377721)

I caught Zonk watching The Little Mermaid with his iPod in his hand...

It was an iPod nano...

Could it be? (4, Insightful)

Penguinisto (415985) | more than 7 years ago | (#16377725)

*gasp* - could it be the free market in motion working against the MPAA's money grab? COOL!

Man, I don't know whether I actually want to believe what I'm seeing or not...

Now if only they could put the same pressure on the RIAA...

/P

Re:Could it be? (1)

14CharUsername (972311) | more than 7 years ago | (#16378083)

Walmart and Target are what's called monopsonistic buyers. Which is the exactly opposite of a free market.

In a free market the consumer has the power. This is negotiation between corporations. Whatever Walmart/Target and Disney/Apple finally agree to, the consumers just have to bend over and take it. The consumer has no say whatsoever in the price of anything here. That is not a free market.

Re:Could it be? (1)

Penguinisto (415985) | more than 7 years ago | (#16378685)

Actually, it is, though not directly.

I grok what you're getting at as per the two retailers and the weight they carry, but I gotta be picky on something: WalMart and Target often (if not mostly) compete directly against each other, and against others, in any given city or town. By definition the term "monopoly" in any form would have a very hard time applying to either of them (esp. when you throw in other DVD-selling entities like KMart, ShopKo, BestBuy, and Circuit City, as well as regional big-box retailers like Venture (I think they're still around in the midwest US), et al).

I do think that this ultimately benefits the consumer, because the downward pressure on prices may indeed ripple outwards. After all, if the two biggies get a cut, KMart and Best Buy aren't going to sit idly by and just take it - they'll want a piece of the discounts too. This may (hopefully) put in place something that has been sorely lacking in this industry (and others like it)... actual competition for the consumer dollar. After all, WalMart and Target aren't demanding lower pricing because they're wanting to keep the movies for themselves, but because they want to better attract the consumer dollar for the movies that they want to retail in turn.

/P

Apples vs. Oranges: 640x480 movie file != DVD set (5, Insightful)

mrfett (610302) | more than 7 years ago | (#16377731)

why should these two products be priced equivalently? The retailers are looking for preferential treatment, not equal treatment. Download services are selling gimped products, not full multi-disc DVD collections. the two things are entirely different, and if anyone is being short-changed on price it's the download services. Why buy only the movie when for $2-4 more you can get all the extra content at higher quality?

Re:Apples vs. Oranges: 640x480 movie file != DVD s (1)

sakasune (772886) | more than 7 years ago | (#16377837)

Why buy only the movie when for $2-4 more you can get all the extra content at higher quality?

But you're telling me I have to actually leave my room (parent's basement) and drive to a store and purchase a physical copy of something? Bah!

Re:Apples vs. Oranges: 640x480 movie file != DVD s (2, Insightful)

FlyByPC (841016) | more than 7 years ago | (#16378011)

No,no, no -- that's what NetFlix / Blockbuster are for.
(That, and your trusty DVD+-R...)

Re:Apples vs. Oranges: 640x480 movie file != DVD s (1)

jedidiah (1196) | more than 7 years ago | (#16378515)

Nah... just go to Frys.com and have them ship you that 2TB consumer storage array they sell.

Re:Apples vs. Oranges: 640x480 movie file != DVD s (1)

sakasune (772886) | more than 7 years ago | (#16378581)

No,no, no -- that's what NetFlix / Blockbuster are for.

Yeah, but the mailbox is still outside...

Re:Apples vs. Oranges: 640x480 movie file != DVD s (1)

gEvil (beta) (945888) | more than 7 years ago | (#16378005)

Why buy only the movie when for $2-4 more you can get all the extra content at higher quality?

But Daaaadddd...I wanna watch it nooooowwwwwwwwwww!!!

Re:Apples vs. Oranges: 640x480 movie file != DVD s (1)

Qzukk (229616) | more than 7 years ago | (#16378095)

Sure thing son, here you go!

Buffering 0.0001%...

Homer says it all... (1)

misleb (129952) | more than 7 years ago | (#16378391)

Moe: This baby can flash-fry a buffalo in 40 seconds!
Homer: 40 seconds? Oooo, but I want it now!

WTF? (2, Insightful)

stealie72 (246899) | more than 7 years ago | (#16377747)

OK, am I the only one who thinks that $12.99 for a magical digital-only copy isn't that great of a price?

For an extra $2, I get the discs with full-quality DVD video on them, and I can burn them in whatever format I want, and use them on any DVD-equiped TV. Not to mention a handy-dandy carrying case with some nice graphics from the movie on it.

Seriously, if ITMS was selling it for like $6, I could see retailers being pissed, but $12.99? Give me a break.

You damned felon - rat out your source! (1)

Overzeetop (214511) | more than 7 years ago | (#16378687)

Oh, sure, your might consider it fair use to burn them in any format you want, but those discs are encrypted.

So, either you need to demonstrate that you can code an entire decryption and storage program for transferring those movies, or we just might need to have you talk to Bruno about where you acquired your illegal decryption software. You see, it's legal for you to do this on your own, but nobody is allowed to help you, by law.

Isn't modern government swell! [/sarcasm]

BTW - I think the digital movie-only version should be on par with a typical 1 or 2 night rental fee; maybe less if it can't be burned to a playable DVD. I'd still buy the physical version (and, hey, I did!) because it comes with the packaging (which I promptly store and never look at again) and the extras (which I might look at on one in five discs I get). More importantly, it means I've got a copy I can _resell_ if I decide I don't want it anymore. $14.99 paid less $8 recovered on ebay when I'm tired of it = $7 net value. Take away the values of the extras and I'd say iTunes is about $6-8 overpriced.

IMO, Target is just looking for leverage. It's a game retailers play all the time. Not really news, unless you take the point that the online version is, indeed, an inferior version and the studios are about to admit that fact.

Re:WTF? (1)

Zadaz (950521) | more than 7 years ago | (#16378703)

No, you're not the only one.

And don't don't forget all of the extras, languages, etc that aren't part of online efforts.

As I've said before, I would -love- to buy movies online. But they have got to make it worth it for me. These crippled, compressed wastes of bandwidth are worth a lot less than a DVD I can use as I please. (Well, not legally, but still.)

Re:WTF? (1)

TubeSteak (669689) | more than 7 years ago | (#16378799)

OK, am I the only one who thinks that $12.99 for a magical digital-only copy isn't that great of a price?
Think about all the clueless computer users, for whom just burning a CD/DVD is a big deal that required note taking and step by step instructions.

Now consider that they do not have the ability to comprehend downloading a program like Gordian Knot and ripping/encoding their own DVD Rips, much less using whatever craptacular tool might come with their burning software.

$12.99 is a magical price, because it means they do not have to climb the (for them) intensely steep learning curve required to DIY. They aren't stupid in general, just with computers.

Target has the advantage (2, Insightful)

sheldon (2322) | more than 7 years ago | (#16377751)

If I had a choice...

$15 at Target
$13 at iTunes

$1 at the movie rental kiosk

I'm going with the movie rental kiosk, unless I want to keep the movie for a long time so I can watch it many times... I'll go with the DVD at Target. So I don't think Target has much to fear here as far as lost revenue.

I will say, that Apple's DRM is just a whee bit better than DivX, although not by much... Sheesh!

Make sure you deauthorize your computer before you upgrade your RAM, hard disk or other system components. If you do not deauthorize your computer before you upgrade these components, one computer may use multiple authorizations. If you find you have reached 5 authorizations due to system upgrades, you can reset your authorization count by clicking Deauthorize All in the Account Information screen. Note: You may only use this feature once per year. The Deauthorize All button will not appear if you have fewer than 5 authorized computers or if you have used this option within the last 12 months.

i don't get it.. (1)

jspectre (102549) | more than 7 years ago | (#16377759)

target and walmart aren't selling the same product. yes, it's the same movie. but one is a small, crappy-resolution download vs. a physical dvd, chock-full-of-extras, better video quality, that i can watch on most any dvd player i can put my hands on.

if nothing else, stores should be saying "don't buy that online-store inferior movie for $9.99, come buy our better product for $5 more!"

corporate greed is one thing, but stupid corprate greed is just stupid.

Re:i don't get it.. (1)

IgnitusBoyone (840214) | more than 7 years ago | (#16377935)

I have to agree.

People enjoy packaging if they didn't special edition's of DVD's would not sale. The movie industry should just tell them that if they do not want to carry there product then some one else will. Wal-Mart may sale 1 in 5 DVD's but people see DVD's in other places and if Wal-Mart stopped carrying Movies entirely then either downloads would go up or People would start buying them else where. I think given the nature of the product the store has more to fear from not carrying it then it does from worrying about some one distributing a lesser product at a lower price.

Wal-Mart has three options.
Ignore the issue and realize that itunes only allows you to do X amount with your DVD and the average person will not be happy with the service.
Acknowledge the issue and campaign against it.
If they fail to do either they will only hurt themselves. I would argue that most people come in to the electronics section of Wal-Mart not for TV's and DVD players, but for the DVD's CD's and other small things that the person needs day to day. You lose the selection less people will browse and less TV will be sold.

No reason to freak out (1)

businessnerd (1009815) | more than 7 years ago | (#16377793)

Wal-Mart and Target and stores like them should not be too worried at this point. At the moment, not many people are purchasing their movies via download. For most, downloading an entire DVD is an extremely time consuming process even with cable or dsl. The average broadband connection will take hours to download a full movie and all of its extras. Then on top of this, there is the "last ten feet" problem. For most consumers, they want to play it in their living room. Most consumers do not have a MythTV box with an NFS share to the desktop pc in the office, so they will want to burn the movie to a DVD to play on their DVD Player. For most, this may require more than one try, resulting in more than one coaster, and let's just hope that they burned the correct DVD format (DVD+R, DVD-R, etc.) to work on their player. Most consumers will still find it much easier to go to the store and pick up the DVD with all of it's packaging and not have to worry about all of the above. Instant gratification. Furthermore, they are probably going to be at Wal-Mart to pick up other products anyway, so it's no inconvenience to get to the store in the first place.

Regardless, the brick and mortars have no right to complain about the pricing difference. $2 is not significant and is actually a pretty good deal when you consider how much cheaper it is to distribute a digital copy over the internet compared to producing disks with packaging etc, plus the stores distribution overhead.

Class play (4, Insightful)

suv4x4 (956391) | more than 7 years ago | (#16377813)

Class business play in 6 acts:

1. "we threaten to reduce shelf space for DVD-s" -> they don't know of online offers will decrease DVD sales, but they add few numbers and decide it's plausible, therefore worthy of protection

2. let's say Hollywood proceeds with undercutting them online

3. retailers reduce shelf space: as a result from this, DVD sales decrease. Retailers say: "you see? you're ruining out business"

4. Hollywood increases online prices to match DVD's in fear not to lose from DVD sales

5. People refuse to buy vaporware DRM-ed download for the cost of a DVD and online sales wane

6. Aftergame: retailers are happy they eliminated the competition (online), Hollywood is happy they kept their DVD sales (not that they'll stop bitching about otherwise), customers: screwed.

The wrong approach for Walmart (1)

sjonke (457707) | more than 7 years ago | (#16377861)

All Walmart has to do is go with the model they've proven viable time and time again: switch to sweatshop and/or child-labor-produced DVDs, reduce staff salary's and benefits and eliminate needless training.

Uh, sorry... (4, Informative)

Kantara (246758) | more than 7 years ago | (#16377919)

But Target and Wal-Mart needs to RTFP. Apple's pricing is as follows:

$9.99 - Library purchase
$12.99 - Pre-release and new releases for the first week
$14.99 - After one week as a new release and before it becomes a library purchase (Take a look at Annapolis - $14.99. It was $12.99 the first week Apple started to sell videos)

So, Apple gets one week where they are $2 cheaper before Target matches and Wal-Mart undercuts their pricing. They are just complaining that they have new competition.

Re:Uh, sorry... (1)

sottitron (923868) | more than 7 years ago | (#16377973)

Hmm... $2.00 discount for the first week. Sure sounds like the tried and true CD/DVD distrobution scheme to me.

This just makes me want to stop shopping at Target (1)

sottitron (923868) | more than 7 years ago | (#16377927)

I expected this from Walmart, but Target? By the way, what about the DVDs that are $7.50. As a consumer I should be complaining that I can't download that from iTunes for $5.50. PLUS, its not like my broadband connection is free. Even forgetting the DRM, I liken the *SLIGHT* discount I would get if I cared to purchase The Little Mermaid as a bonus similar to the bonus I get from my Costco membership... Only broadband costs 3-4X more a year than Costco...

I could see their point except for a few things (1)

sokoban (142301) | more than 7 years ago | (#16377987)

First of all, DVD media and downloadable iTunes movie content are not in the same market really. DVDs are made to be played on DVD players and have much higher resolution, but cannot be ripped and put on an iPod or other portable video player (yeah, I know. it is possible, but impractical for most people). Conversely, movies downloaded from the iTMS are of a significantly lower resolution than a DVD, cannot easily be played on a DVD player, and lack special features common on DVDs, but you can play them on a portable video player. Big box stores are assuming that people who buy a DVD will not buy a movie download and vice-versa. This doesn't seem correct really. If somebody wants to play their digital download on a real screen, they will still pretty much have to buy a DVD. Also, if somebody wants to watch a video on their portable device, they pretty much have to buy the digital download. People will buy both if they want to, but I'm sure if ripping DVDs was made easier there would be little to no effect on DVD sales by allowing digital downloads. Those who want to buy a DVD will not be dissuaded from doing so by the availability of a digital download, nor will those who only buy a download have been likely to buy a DVD in the first place.

iTunes Video Resolution (1)

norminator (784674) | more than 7 years ago | (#16378431)

movies downloaded from the iTMS are of a significantly lower resolution than a DVD

You do know that their video is 640x480 now, don't you? I realize it's not 720x480, but for a standard 4:3 video, it's basically the same thing. I could understand the point if they were still doing 320x240. Of course, just because the resolution is basically the same as broadcast NTSC, doesn't mean the quality is the same. I do realize that the quality of the iTunes downloads is not likely to be as high as a 4:3 DVD. (I haven't had a chance to really get a look at the 640x480 videos from iTMS.) I just think it's weird to see people complaining about the resolution.

Offer the retailers DVDs on a spindle (1)

MDMurphy (208495) | more than 7 years ago | (#16378001)

First, the difference in prices suck and the retailers should be happy they're not reallying being undercut. I get 2 audiobooks a month from Audible.com. Heavy on the DRM, but they work great for listening on the ipod. I pay $10 each for those two books. Retail, to buy the 10-15 CDs they are usually sold on cost $40-60 each. Big savings and the downloaded version is actually more convenient that the CDs.

If the retailers want to sell "the same thing" let them buy the pre-recorded DVDs on a spingle. No box, no sleeve, no art work. They're free to put up a fancy kiosk showing a preview and put cheap paper sleeves next to them for people to bag their own just like buying apples. I bet that could retail for $2 less.

DRM'd, lower quality movies that take a long time to download are no threat to DVD sales. People who have the computer and internet connection to download and watch these movies also have the bits necessary to rent a DVD for $1 and copy it on a $.50 blank disc. So people who want the absolute lowest price aren't downloading they're renting. So let them rant and rave, but they'll still sell DVDs. Even if it did undercut sales of people coming into the store to buy only the DVD, there are a lot of other people who buy something else while there, or just get the DVD as long as they were there for something else.

Target and Walmart CEOs should join Disney's Board (1)

sottitron (923868) | more than 7 years ago | (#16378009)

Seems like all the Walmart and Target CEOs need to do is produce an animation studio that puts Disney's to shame and join the Disney Board and become the largest shareholders at Disney in the impending purchase of said animation studios. Sheesh. They act like it would be so hard!

And the point is? (2, Interesting)

frovingslosh (582462) | more than 7 years ago | (#16378023)

The two-disc rerelease of Disney's 'The Little Mermaid' now retails for $14.87 at Wal-Mart and $14.99 at Target. The movie can be bought for $12.99 on iTunes.

So for $14.87 you can get 2 already made discs at Walmart, in a nice storage case, with plenty of extra bonus material, that will play on any (region 1) DVD player, or for less than 2 dollars less you can spend your own bandwidth to deliver a copy to you, and provide your own packaging and media, that contains only the movie, is of a much poorer quality, has a DRM infestation that will keep you from using it where you want to use it, and eventually you will not be able to play back on the system you want to play it back on. If you buy the Wal-Mart version you ratain right of first sale and you are free to resell it if you want, or lend it to friends, or even give it away. If you have the downloaded version you can't legally do any of these. And somehow Wal-mart wants to claim that this alternate outlet puts them at a disadvantage? I'm sure they would like to have a complete monopoly of distribution, but any argument that cheaper on-line sales unjustly undercuts them is completely bogus, and if anything it might even improve their sales when the on-line mark realizes what a bad purchase they made. It certainly makes the Wal-mart price for a couple of mass produced and packaged discs look like a great deal in comparison to on-line pricing.

Equipment Costs (1)

norminator (784674) | more than 7 years ago | (#16378527)

So for $14.87 you can get 2 already made discs at Walmart, in a nice storage case, with plenty of extra bonus material, that will play on any (region 1) DVD player...

Don't forget the fact that those region 1 DVD players can be had for $30, instead of having to pay $500 for a computer (or more for a Mac), plus $250 - $350 for the convenience of having an iPod to carry the movies around on, plus $300 for the Apple iTV set-top box to actually be able to watch the movies on your TV. I know that most people have a computer already, and a lot of people already have iPods for music, but really the cost of watching iTunes movies is quite a bit higher than the cost of watching DVDs when you take all of the requred equipment into account.

Can't compare online to hard media (1)

dschuetz (10924) | more than 7 years ago | (#16378035)

The "hard media" DVDs *should* be more expensive than softcopy-only versions of a movie. The versions sold over iTunes (to my knowlege, I've not actually bought one) only have the movie itself, at a lesser resolution, and none of the special features, extras, secondary language tracks, etc.

That said, I think that the online copies ought to be even cheaper (high price of $10, and maybe $7.50 for "older" titles, $5.00 for "classics"), for just that reason.

This will definitely be interesting to watch, to see how it all shakes out. I think that Apple will win out in the end, but that it won't make a significant dent in physical DVD sales. Even if Apple manages to become the #1 vendor for movies over Wal-Mart, Target, Best Buy, etc., there are still LOTS of physical copies being sold through those other vendors. No way they ever account for more than 50% of "movie" sales (and probably will top out much less than that, but what do I know), unless and until they are able to sell the entire DVD contents (features, etc.), at DVD resolutions.

Wouldn't buy a movie as download anyway... (1)

AceCaseOR (594637) | more than 7 years ago | (#16378063)

Frankly, when I buy a DVD, I generally want the special features, as well as the convience of being able to watch it on my TV. As I don't have a Media Center PC, I don't get that covenience with pay-to-download movie services. I also don't get the bonus features from any of those services. Until iTunes or Amazon's service can satisfy my demands for those, I'll stick with the physical disks, thankyouverymuch.

Studios Win Again (4, Insightful)

mpapet (761907) | more than 7 years ago | (#16378091)

The studios controlling the distribution of these films are the big winners again.

Retail DVD costs: Media, replication, packaging, distribution, slotting fees, spoils and other logistics problems, and varying amounts of advertising. Throw in the loss of control of the DVD content. That's your priviledge to make and keep personal copies, freedom to play the movie when and where you want. Don't forget the graft required to get stuff on the shelves of your average big box retailer, loss of control of the distribution channel once it hits the retailer's dock and a million other tiny headaches.

Retail Download: Zero duplication costs, nominal distribution costs, advertising. *Total* control of distribution, ability to control when and where the consumer can play the content. (windows media player 11 has this feature) Beyond that granular control of the rights conferred upon the consumer through DRM.

Consumers are willing and happy to trade their freedom for $2. The studio pocket millions of extra dollars.

For every j@ck@ss that thinks this is the "free market" at work, will they please explain where the innovation is in this model? How is the consumer market for movies -more- competitive as a result? I can't see how consumers benefit in an industry controlled by an oligopoly.

$2?? (2)

misleb (129952) | more than 7 years ago | (#16378127)

I'd be more than willing to pay an extra $2 for the convenience of packaging and burning to disc. I mean, I'd probably do it anyway myself if I downloaded it. The blank media itself nearly takes up that $2. I say a $2 difference isn't enough to make the download time, time burning, and media worth it. The brick and mortar stores are actually getting a pretty good deal.

Although I don't find myself buying movies at brick and mortar stores. If I'm really going to buy a movie (pretty rare) I'll just order it from Amazon or something. Usually it is for a gift. I don't see much point in owning movies except for the few really great ones that you might actually watch more than once or twice. But even then, repeat viewing loses its appeal as I get older.

-matthew

it makes sense... (1)

CaptainRiot (987698) | more than 7 years ago | (#16378189)

it just makes sense that if you're buying it from an online download place like iTunes that you should have to pay less

Not Fair... (1)

Warlock7 (531656) | more than 7 years ago | (#16378379)

It's simply not fair that when you download a film that you don't get the extras, a disc and all that wonderful packaging. It's also not fair that the quality of the downloaded content isn't as good as a full DVD of the same film. Apple should be forced to include all of these features so that there are equivalent items being bought by the consumer.

Then, maybe, just maybe, Target and Wal-Mart will actually have an argument.

Heh Heh (1)

drinkypoo (153816) | more than 7 years ago | (#16378389)

Target has sent a letter warning 'that Target might have to reconsider the amount of shelf space allocated for movies if studios undercut the wholesale price of DVDs by giving online services a better deal on digital offerings

Studios sent a letter back saying "Wal-mart sells enough discs for two target chains put together, and then some, so we don't need you. don't let the door hit your ass on the way out. By the way, your business model is doomed, suckers." Enclosed was an audio CD containing 74 minutes of laughter.

Until iTunes Movies can be Burned... (1)

w0lver (755034) | more than 7 years ago | (#16378539)

The retail channel has nothing to be worried about. I still need to buy a copy so my kid can watch the movie on his DVD player in the car.
Other factors help too, the HD formats, extras only available on DVD, desire to own the physical...
CDs have not disappeared and the DVD has a stronger value proposition going forward; these are just threats to negotiate more of a margin for retail...

No DVD extras with iTunes movies (1)

dorzak (142233) | more than 7 years ago | (#16378603)

Of course there isn't all the extra scenes, games, etc that are you the physical DVD when you download from iTunes.

We're forgetting something here. (0)

Gothic_Walrus (692125) | more than 7 years ago | (#16378633)

I wasn't surprised to come here and see the "Physical copy with better quality and extras = WIN" argument posted, over and over and over. Unless I've missed it, though, the people making the argument are missing a key point...

Most people don't know or care about the differences between digital media and the physical DVD.

The retailers have already figured out through the music poriton of the iTunes store that, for millions of people, the difference in quality, flexibility, and future usability doesn't matter enough to justify getting the physical version instead of paying for the (often cheaper and easier) download. And if it can meet the needs of the person who bought it, why complain? After all, if all they want is for it to play on their iPod now, why not download it?

Not that this is anything new, mind you, and I'm not saying that I disagree with the users here...it just always amazes me how many are shocked and awed by the fact that anyone would even CONSIDER downloading that DRMed piece of "crap."
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