Wal-Mart Cancels Its Movie Downloads

Wal-Mart canceled its movie download service officially on December 27, 2007 but their website said the service was stopped on December 21, 2007 and no refunds for videos already downloaded.

Wal-Mart began its online video downloading began less than a year ago in February, 2007. The media industry believed that Wal-Mart would change the movie industry by introducing millions of DVD buyers to downloading. Wal-Mart was the first major retailer to offer video downloads the same day titles were released on physical DVDs.

Wal-Mart claims that they shut down the site due to Hewlett Packard discontinuing the technology used on the site. However, if this is the case, why has Walmart.com spokeswoman, Amy Colella, also said that they will not look for another company to power the service? They will still sell physical DVDs at its stores and online,

Hewlett Packard spokesman, Hector Marinez, has said the company discontinued its services because sales were not as expected.

This cancellation hasn't really affected Wal-Mart stock, which only dropped off 1.3% (61 cents) to close at $47.77 on Thursday.

Two years ago, Wal-Mart also cancelled its online DVD rental service.

Out of 2006's $24.5 billion in DVD and home video sales and rentals, download sales were only one percent. Download sales are estimated to grow to ten percent within ten years.

Also on December 27, 2007, Twentieth Century Fox made an agreement with Apple to offer movies for download at iTunes.

I believe Wal-Mart needs to wait on their movie services. First their online movie rental service and now their movie download services have gone belly-up. They need to do better research and see that Netflix and Blockbuster are the market leaders in online rentals and, additionally, Amazon in movie downloading.