Wal-Mart opened a digital movie stall

Finally, the retail giant has jumped into the online movie download market - an area that has yet to attract customers, but is expected to break out strongly in the near future.

The test version of Wal-Mart's online video service will officially "unveil" tonight, providing a digital version of about 3,000 popular film and television movies.

According to analysts, the largest retailer in the US will use its giant power to " devalue " existing music download services. Specifically, each movie will sell for 12.88 to 19.88 USD and each TV episode costs 1.96 USD - which is 4 cents cheaper than Apple's iTunes counter.

In fact, some movies sold on iTunes also have very cheap prices ($ 12.99), but on condition that customers have to book in advance or during the first week of sale. After that, the price will be raised to $ 14.99. However, this preferential policy only applies to the films of the two companies, Walt Disney and Paramount Picture.

Most major studios refuse to shake hands with iTunes, partly because Apple insists on selling all movies at a single price. In the meantime, they like the rich pricing that Wal-Mart is offering.

Apple's pricing policy also triggered "battles" between the studio on one side, retailers like Wal-mart and Target on the other. Retailers do not want the studio to sell digital movies at cheaper prices than wholesale DVDs.

"ITunes cannon fire"

"Desperate Housewives" - one of the most popular TV series in the world today.Source: ABC

Old titles, classic classics, will be sold at Wal-mart's starting price of $ 7.50, considerably cheaper than iTunes' $ 9.99.

In addition, Wal-mart also used its position to put pressure on major studios, forcing them to join its new service. Wal-mart currently accounts for more than 40% of DVD sales in the US, and of course no studio wants to upset their biggest customers.

The biggest impact of Wal-mart jumping into the digital download market is probably the fact that it allows studios to freely shake hands with other online services.

" The reel is finally moving. Now the studios are free to pursue their goals without having to worry about how Wal-Mart will think ," said analyst Tom Adams of Adams Media Research. .

Last year, Amazon.com, the world's largest online sales site, launched an online video download and rental counter called Unbox. However, the service lacks attractive home movies from Disney. A number of other movie rental and selling services are Movielink (owned by 5 major studios) and CinemaNow.

However, Wal-Mart will only sell, not rent movies online. Downloadable movies can be viewed on a computer or transferred to a compatible player with Windows Media. Movies will not be viewable on Apple computers or iPod famous music players.

In addition, they cannot burn DVDs, although Wal-mart said it hopes to open this feature later this year.

Moderate optimism

However, Wal-mart does not think that the sales of online movies will kill the DVD business, at least a few years.

" With the health of the current DVD industry, plus the high-definition format that is about to land, this is definitely still a lucrative market for years to come, " said Kevin Swint, Director of Division. Wal-mart's digital media said.

It is estimated that online download services will reach $ 4 billion in annual revenue in five years, compared with $ 27 billion in revenue from renting and selling DVDs.

But can Wal-Mart succeed in the digital business as it did in the real world? That question still cannot be answered immediately.

In 2005, the company had to give up its efforts to develop an online DVD rental service, competing with Netflix. In addition, the company also faces the common challenges of selling online movies: it is that movies cannot be transferred easily from a computer to a TV screen.

" The main problem is that users want to enjoy movies on their home TV screens. The best way to do this is to buy DVDs, " commented expert Josh Bernoff of Forrester Research.

Trong Cam