Wal-Mart is planning to test, much the way itunes has, the selling of full movies online. The program will be launched next year, and the business plan is pretty fantastic. In order to avoid the extinction of DVD’s, Wal-Mart will have its consumers buy the DVD of any given movie, and charge only a bit extra for online downloading. Essentially, a user who – because we live in a society that demands instant satisfaction – cares to watch a movie can buy a DVD online and pay an extra few dollars to download that same film to his or her personal computer. Wal-Mart is smart to strategize as they have. In doing so, they will protect their own DVD stock, as users will be able to watch the movie right away on a personal computer, but will also be ordering the $10 to $15 DVD, which will be received by mail.
With the exception of launching this new program, hosting films online cost Wal-Mart little extra and is almost certain to generate more revenue. It also helps them to, possibly in the future, phase out some products offered at stores by offering them online instead.
-Matt Shapiro
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