Whatever Happened to…Wal-Mart’s Video Download Store?

We admit it freely: sometimes we can’t help the snarkiness. It just comes out. For example, let us return to this gem from ”The Daily Loper – February 7”:

Headline: Wal-Mart entry to video downloads a ‘game changer’
Us: Yeahhhhhh . . . no.

Like most of you, we read the Reuters piece — classic journalism filled with breathless anticipation and so-far-off-base-it’s-funny commentary from media experts — with a dose of skepticism. Despite the fact that Wal-Mart has a strong brand name, we simply could not fathom how the Wal-Mart product could change the game. In fact, our analysis of the service suggested quite the opposite. Still, Memory Lane is a fun place, so let’s look back at a fun comment:

Rob Enderle, an independent analyst at the Enderle Group, said Wal-Mart’s download offering is a “game changer” that will help set off “a long decline” for DVD sales.

If only the experts had responded to reality instead of a press release.

As evidenced by Kirk’s altruistic experiment with another Wal-Mart download service, we remained full convinced that there is a huge difference between selling physical consumer goods and digital downloads. The fact that Wal-Mart didn’t take a step forward without getting buy-in from all the major media companies was the first clue, in case you’re wondering. At no point did any of the coverage of the new service indicate that the consumer was a key factor.

As it turns out, the consumers of the world didn’t take to the Wal-Mart service. Of course, it’s not the fact that sales were, uh, lackluster that drove the decision. Nope, it’s all because the technology was disappearing:

In a statement, Wal-Mart spokeswoman Amy Collella said the company closed the store after Hewlett-Packard Co., which provided the software running the site, “made a business decision to discontinue its video download-only merchant store service.”

Yeah, and I have some swampland in Florida to sell you. Hewlett-Packard told the world’s largest retailer that they would no longer offer a service, and Wal-Mart shrugs and says, “Okay, I guess we’ll just pull the plug on this highly publicized and expensive project. No harm, no foul.”

It is interesting that the announcement (this time courtesy of the Associated Press) notes that Wal-Mart’s prices were a few cents less than iTunes prices. Price, you see, is not necessarily the motivating factor for consumers (though, yes, it matters). What is really important — all together now! — is convenience and ease-of-use. I cannot say this often enough (which is why I say at least once a week). People want the media they want in a usable format. Wal-Mart neglected this one basic rule of sales: the customer is always right.

While it is unclear how it will work, consumers who purchased movies and television programs will still be able to play them. For the time being. We don’t actually have a lot of faith in this notion.

Comments are closed.