Wal-Mart Sells Movies, TV Shows Online

LOS ANGELES -- Wal-Mart Stores Inc. has launched its long-awaited online movie download store, entering a market that has yet to catch on with consumers but is expected to grow rapidly.

A "beta" version of the online video store, which debuted Tuesday, sells digital versions of about 3,000 films and television episodes from all the major studios and some TV networks, including Fox Broadcasting. Wal-Mart will not initially offer content from ABC, CBS or NBC, although the company said it hopes to add shows from those networks.

The nation's largest retailer is using its buying power to beat the prices charged by other download services in many cases, offering films from $12.88 to $19.88 and individual TV episodes for $1.96 _ 4 cents less than Apple Inc.'s iTunes store.

Apple charges less for some films sold on iTunes _ $12.99 when pre-ordered and during the first week of sale, or $14.99 afterward. But it only carries films from two studios, The Walt Disney Co. and Viacom Inc.'s Paramount Studios.

Most studios have resisted signing deals with iTunes in part because of Apple's desire to sell movies at one price. Studios prefer variable pricing such as Wal-Mart is offering.

Apple's pricing has also caused scuffles between studios and major retailers, including Wal-Mart and Target Corp. The retailers don't want studios to sell digital copies of films cheaper than the wholesale price of physical DVDs.

Wal-Mart's online store will sell older titles starting at $7.50, compared with the $9.99 charged by iTunes.

Wal-Mart also used its significant clout to launch its online store with films from all major studios. The Bentonville, Ark., retailer accounts for about 40 percent of DVD sales, and studios have been careful not to anger their largest customer.

Given Wal-Mart's importance, the studios readily agreed to sell films on the retailer's new site, analysts said.

The biggest impact of Wal-Mart's entry into the digital download business may be that it now frees studios to cut deals with other online services.

"It gets the ball rolling finally," said Tom Adams of Adams Media Research. "Now the studios are free to pursue it as aggressively as they can without worries about what Wal-Mart is going to think."

Amazon Inc. launched its "Unbox" video rental and download store last year without films from Disney.